EXECUTION
EXHIBIT 10.78
$15,400,000
LEASE AGREEMENT
BETWEEN
BNP LEASING CORPORATION,
AS LANDLORD
AND
KLA INSTRUMENTS CORPORATION,
AS TENANT
EFFECTIVE AS OF AUGUST 10, 1995
PURSUANT TO AND AS MORE PARTICULARLY PROVIDED IN SUBPARAGRAPH 20.(j) OF THIS
LEASE, THIS LEASE AND THE PURCHASE AGREEMENT REFERENCED HEREIN ARE TO
CONSTITUTE, FOR INCOME TAX PURPOSES ONLY, A FINANCING ARRANGEMENT OR CONDITIONAL
SALE. AS PROVIDED IN SUBPARAGRAPH 20.(j) OF THIS LEASE, LANDLORD AND TENANT
EXPECT THAT TENANT (AND NOT LANDLORD) SHALL BE TREATED AS THE TRUE OWNER OF THE
PROPERTY FOR INCOME TAX PURPOSES, THEREBY ENTITLING TENANT (AND NOT LANDLORD) TO
TAKE DEPRECIATION DEDUCTIONS AND OTHER TAX BENEFITS AVAILABLE TO THE OWNER.
TABLE OF CONTENTS
Page
1. Definitions............................................................................................ 2
(a) Administrative Fee............................................................................ 2
(b) Active Negligence............................................................................. 2
(c) Additional Rent............................................................................... 2
(d) Advance Date.................................................................................. 2
(e) Affiliate..................................................................................... 2
(f) Applicable Laws............................................................................... 3
(g) Applicable Purchaser.......................................................................... 3
(h) Attorneys' Fees............................................................................... 3
(i) Base Rent..................................................................................... 3
(j) Base Rent Commencement Date................................................................... 3
(k) Base Rent Date................................................................................ 3
(l) Base Rent Period.............................................................................. 4
(m) Breakage Costs................................................................................ 5
(n) Business Day.................................................................................. 5
(o) Capital Adequacy Charges...................................................................... 5
(p) Carrying Costs................................................................................ 5
(q) Closing Costs................................................................................. 5
(r) Change of Control Event....................................................................... 5
(s) Code.......................................................................................... 5
(t) Commitment Fee................................................................................ 5
(u) Completion Notice............................................................................. 5
(v) Completion Deadline........................................................................... 6
(w) Construction Advances......................................................................... 6
(x) Construction Allowance........................................................................ 6
(y) Construction Periods.......................................................................... 6
(z) Custodial Agreement........................................................................... 6
(aa) Debt.......................................................................................... 6
(ab) Default....................................................................................... 6
(ac) Default Rate.................................................................................. 6
(ad) Defaulting Participant........................................................................ 6
(ae) Designated Payment Date....................................................................... 7
(af) Effective Rate................................................................................ 7
(ag) Environmental Indemnity....................................................................... 7
(ah) Environmental Laws............................................................................ 7
(ai) Environmental Losses.......................................................................... 7
(aj) Environmental Report.......................................................................... 8
(ak) ERISA......................................................................................... 8
(al) ERISA Affiliate............................................................................... 8
(am) ERISA Termination Event....................................................................... 8
(an) Escrowed Proceeds............................................................................. 8
(ao) Eurocurrency Liabilities...................................................................... 9
(ap) Eurodollar Rate Reserve Percentage............................................................ 9
(aq) Event of Default.............................................................................. 9
(ar) Excluded Taxes................................................................................ 9
(as) Fair Market Value............................................................................. 9
(at) Fed Funds Rate................................................................................ 9
(au) Funding Advances.............................................................................. 10
(av) GAAP.......................................................................................... 10
(aw) Hazardous Substance........................................................................... 10
(ax) Hazardous Substance Activity.................................................................. 10
(ay) Impositions................................................................................... 10
(az) Improvements.................................................................................. 10
(ba) Indemnified Party............................................................................. 10
(bb) Initial Funding Advances...................................................................... 11
(bc) Initial Improvements.......................................................................... 11
(bd) Landlord's Lender............................................................................. 11
(be) Last Advance Date............................................................................. 11
(bf) LIBOR......................................................................................... 11
(bg) LIBOR Period Election......................................................................... 12
(bh) Lien.......................................................................................... 12
(bi) Losses........................................................................................ 12
(bj) Maximum Construction Allowance................................................................ 12
(bk) Notice of Last Advance........................................................................ 12
(bl) Ordinary Negligence........................................................................... 13
(bm) Outstanding Construction Allowance............................................................ 13
(bn) Participant................................................................................... 13
(bo) Participation Agreements...................................................................... 13
(bp) Permitted Encumbrances........................................................................ 13
(bq) Permitted Hazardous Substance Use............................................................. 13
(br) Permitted Hazardous Substances................................................................ 14
(bs) Permitted Transfer............................................................................ 14
(bt) Person........................................................................................ 14
(bu) Plan.......................................................................................... 14
(bv) Pledge Agreement.............................................................................. 14
(bw) Potential Lien Claimants...................................................................... 14
(bx) Prime Rate.................................................................................... 14
(by) Purchase Agreement............................................................................ 15
(bz) Qualified Payments............................................................................ 15
(ca) Remaining Proceeds............................................................................ 15
(cb) Rent.......................................................................................... 15
(cc) Responsible Financial Officer................................................................. 15
(cd) Revolving Credit Agreement.................................................................... 15
(ce) Scope Change.................................................................................. 15
(cf) Spread........................................................................................ 16
(cg) Stipulated Loss Value......................................................................... 16
(ch) Subsidiary.................................................................................... 16
(ci) Tenant's Knowledge............................................................................ 16
(cj) Term.......................................................................................... 17
(ck) Unfunded Benefit Liabilities.................................................................. 17
(cl) Upfront Fee................................................................................... 17
(cm) Other Terms and References.................................................................... 17
2. Term................................................................................................... 17
3. Rent................................................................................................... 18
(ii)
(a) Base Rent Generally........................................................................... 18
(b) Calculation of Base Rent...................................................................... 18
(c) Upfront Fee................................................................................... 19
(d) Administrative Agency Fees.................................................................... 19
(e) Commitment Fees............................................................................... 19
(f) Additional Rent............................................................................... 19
(g) Interest and Order of Application............................................................. 19
(h) Net Lease..................................................................................... 19
(i) No Demand or Setoff........................................................................... 19
4. Insurance and Condemnation Proceeds.................................................................... 20
5. No Lease Termination................................................................................... 21
(a) Status of Lease............................................................................... 21
(b) Waiver By Tenant.............................................................................. 22
6. Advances for the Purchase of the Land-51 Rio Robles and for Construction............................... 22
(a) Purchase Price of the Land-51 Rio Robles...................................................... 22
(iv) No Event of Default or Change of Control Event....................................... 22
(v) No Sale of Landlord's Interest....................................................... 22
(c) Initial Improvements.......................................................................... 23
(i) Responsibility for Construction........................................................... 23
(ii) Scope Changes........................................................................ 24
(iii) Value Added.......................................................................... 24
(iv) Estoppel Letters Required............................................................ 24
(v) Advances Not a Waiver................................................................ 24
(d) Conditions to Construction Advances........................................................... 24
(i) Prior Notice......................................................................... 24
(ii) Amount of the Advances............................................................... 25
(iii) Insurance............................................................................ 25
a) Title Insurance............................................................... 25
b) Builder's Risk Insurance...................................................... 25
(iv) Progress of Construction............................................................. 25
(v) Evidence of Costs to be Reimbursed................................................... 26
(vi) No Event of Default or Change of Control Event....................................... 26
(vii) No Sale of Landlord's Interest....................................................... 26
(viii) Construction Advance Certificate..................................................... 26
(ix) Payments by Participants............................................................. 26
(e) Completion Notice............................................................................. 27
7. Purchase Agreement, Pledge Agreement and Environmental Indemnity Agreement............................. 27
8. Use and Condition of Leased Property................................................................... 27
(a) Use........................................................................................... 27
(b) Condition..................................................................................... 27
(c) Consideration of and Scope of Waiver.......................................................... 28
9. Other Representations, Warranties and Covenants of Tenant.............................................. 28
(a) Financial Matters............................................................................. 28
(iii)
(b) Existing Contract............................................................................. 28
(c) No Default or Violation....................................................................... 28
(d) Compliance with Covenants and Laws............................................................ 29
(e) Environmental Representations................................................................. 29
(f) No Suits...................................................................................... 29
(g) Condition of Property......................................................................... 29
(h) Organization.................................................................................. 29
(i) Enforceability................................................................................ 30
(j) Not a Foreign Person.......................................................................... 30
(k) Omissions..................................................................................... 30
(l) Existence..................................................................................... 30
(m) Tenant Taxes.................................................................................. 30
(n) Operation of Property......................................................................... 30
(o) Debts for Construction........................................................................ 31
(p) Impositions................................................................................... 32
(q) Repair, Maintenance, Alterations and Additions................................................ 32
(r) Insurance and Casualty........................................................................ 32
(s) Condemnation.................................................................................. 33
(t) Protection and Defense of Title............................................................... 34
(u) No Liens on the Leased Property............................................................... 34
(v) Books and Records............................................................................. 34
(w) Financial Statements; Required Notices; Certificates as to Default............................ 35
(x) Further Assurances............................................................................ 36
(y) Fees and Expenses; General Indemnification; Increased Costs; and
Capital Adequacy Charges...................................................................... 36
(z) Liability Insurance........................................................................... 38
(aa) Permitted Encumbrances........................................................................ 38
(ab) Environmental................................................................................. 39
(ac) Compliance with Financial Covenants and Certain Other Requirements
Established by the Revolving Credit Agreement................................................. 40
(ad) ERISA......................................................................................... 41
10. Representations, Warranties and Covenants of Landlord.................................................. 41
(a) Title Claims By, Through or Under Landlord.................................................... 41
(b) Actions Required of the Title Holder.......................................................... 41
(c) No Default or Violation....................................................................... 42
(d) No Suits...................................................................................... 42
(e) Organization.................................................................................. 42
(f) Enforceability................................................................................ 42
(g) Existence..................................................................................... 42
(h) Not a Foreign Person.......................................................................... 43
11. Assignment and Subletting.............................................................................. 43
(a) Consent Required.............................................................................. 43
(b) Standard for Landlord's Consent to Assignments and Certain Other Matters...................... 43
(c) Consent Not a Waiver.......................................................................... 43
(d) Landlord's Assignment......................................................................... 43
12. Environmental Indemnification.......................................................................... 44
(iv)
(a) Indemnity..................................................................................... 44
(b) Assumption of Defense......................................................................... 44
(c) Notice of Environmental Losses................................................................ 44
(d) Rights Cumulative............................................................................. 45
(e) Survival of the Indemnity..................................................................... 45
13. Landlord's Right of Access and Right to Perform........................................................ 45
14. Events of Default...................................................................................... 46
(a) Definition of Event of Default................................................................ 46
(b) Remedies...................................................................................... 48
(c) Enforceability................................................................................ 49
(d) Remedies Cumulative........................................................................... 49
(e) Waiver by Tenant.............................................................................. 49
(f) No Implied Waiver............................................................................. 50
15. Default by Landlord.................................................................................... 50
16. Quiet Enjoyment........................................................................................ 50
17. Surrender Upon Termination............................................................................. 50
18. Holding Over by Tenant................................................................................. 50
19. Miscellaneous.......................................................................................... 51
(a) Notices....................................................................................... 51
(b) Severability.................................................................................. 53
(c) No Merger..................................................................................... 53
(d) NO IMPLIED REPRESENTATIONS BY LANDLORD........................................................ 53
(e) Entire Agreement.............................................................................. 53
(f) Binding Effect................................................................................ 53
(g) Time is of the Essence........................................................................ 53
(h) Governing Law................................................................................. 53
(i) Waiver of a Jury Trial........................................................................ 53
(j) Income Tax Reporting.......................................................................... 54
Exhibits
Exhibit A......................................................Legal Description
Exhibit B.......................................................Encumbrance List
Exhibit C..................................................Intentionally Omitted
Exhibit D...........................................Contractor's Estoppel Letter
Exhibit E............................................Architect's Estoppel Letter
Exhibit F.....................................................Draw Request Forms
Exhibit G........................................Covenant Compliance Certificate
Exhibit H.........................................Permitted Hazardous Substances
Exhibit I................................Resolution of Disputed Insurance Claims
Exhibit J...........................................LIBOR Period Election Notice
(v)
LEASE AGREEMENT
This LEASE AGREEMENT (hereinafter called this "LEASE"), made to be
effective as of August 10, 1995 (all references herein to the "DATE HEREOF" or
words of like effect shall mean such effective date), by and between BNP LEASING
CORPORATION, a Delaware corporation (hereinafter called "LANDLORD"), and KLA
INSTRUMENTS CORPORATION, a Delaware corporation (hereinafter called "TENANT");
W I T N E S E T H T H A T:
WHEREAS, pursuant to a Purchase and Sale Agreement dated as of July 26,
1995 (hereinafter called the "Existing Contract") covering (i) the land
described in Part I of Exhibit A attached hereto (hereinafter called the
"Land-77 Rio Robles") and any improvements thereon, and (ii) the land described
in Part II of Exhibit A attached hereto (hereinafter called the "Land-51 Rio
Robles" and the Land-77 Rio Robles and the Land-51 Rio Robles are hereinafter
collectively called the "Land") and any improvements thereon, Landlord is
acquiring the Land-77 Rio Robles and any improvements thereon from Amdahl
Corporation (hereinafter called "Seller") contemporaneously with the execution
of this Lease and Landlord anticipates acquiring the Land-51 Rio Robles and any
improvements thereon;
WHEREAS, in anticipation of Landlord's acquisition of the Land and other
property hereinafter described, Landlord and Tenant have reached agreement as to
the terms and conditions upon which Landlord is willing to lease the same to
Tenant, and by this Lease Landlord and Tenant desire to evidence such agreement;
NOW, THEREFORE, in consideration of the rent to be paid and the
covenants and agreements to be performed by Tenant, as hereinafter set forth,
Landlord does hereby LEASE, DEMISE and LET unto Tenant for the term hereinafter
set forth the Land, together with:
(i) Landlord's interest in any and all buildings and
improvements now or hereafter erected on the Land, including, but not
limited to, the fixtures, attachments, appliances, equipment, machinery
and other articles attached to said buildings and improvements
(hereinafter called the "Improvements");
(ii) all easements and rights-of-way now owned or hereafter
acquired by Landlord for use in connection with the Land or Improvements
or as a means of access thereto;
(iii) all right, title and interest of Landlord, now owned or
hereafter acquired, in and to (A) any land lying within the right-of-way
of any street, open or proposed, adjoining the Land, (B) any and all
sidewalks and alleys adjacent to the Land and (C) any strips and gores
between the Land and abutting land (except strips and gores, if any,
between the Land and abutting land owned or leased by Landlord, with
respect to which this Lease shall cover only the portion thereof to the
center line between the Land and the abutting land owned or leased by
Landlord).
The Land and all of the property described in items (i) through (iii) above are
hereinafter referred to collectively as the "REAL PROPERTY".
In addition to the leasehold in the Real Property described above,
Landlord hereby grants and assigns to Tenant for the term of this Lease the
right to use and enjoy (and, to the extent the following consist of contract
rights, to enforce) any interests or rights in, to or under the following that
have been transferred to Landlord by Seller under the Existing Contract, to the
extent any such rights and interests are assignable and related to the Real
Property: (a) any goods, equipment, furnishings, furniture, chattels and
personal property of whatever nature that are located on the Real Property and
all renewals or replacements of or substitutions for any of the foregoing; and
(b) any general intangibles, permits, licenses, franchises, certificates, and
other rights and privileges. All of the property, rights and privileges
described above in this paragraph, together with all furniture, furnishings and
other personalty included in the Initial Improvements (as hereinafter defined)
because of Tenant's purchase thereof with the Construction Allowance (as
hereinafter defined), are hereinafter collectively called the "PERSONAL
PROPERTY". The Real Property and the Personal Property are hereinafter sometimes
collectively called the "LEASED PROPERTY".
Provided, however, the leasehold estate conveyed hereby and Tenant's
rights hereunder are expressly made subject and subordinate to the Permitted
Encumbrances (as hereinafter defined) and to any other claims or encumbrances
not asserted by Landlord itself or by third parties lawfully claiming through or
under Landlord.
The Leased Property is leased by Landlord to Tenant and is accepted and
is to be used and possessed by Tenant upon and subject to the following terms,
provisions, covenants, agreements and conditions:
2. Definitions. As used herein, the terms "Landlord,"
"Tenant," "Existing Contract," "Seller," "Land," "Improvements," "Real
Property," "Personal Property" and "Leased Property" shall have the meanings
indicated above and the terms listed immediately below shall have the following
meanings:
(a) Administrative Fee. "ADMINISTRATIVE FEE" shall have the
meaning assigned to it in subparagraph 3.(d) below.
(b) Active Negligence. "ACTIVE NEGLIGENCE" of an Indemnified
Party means, and is limited to, the negligent conduct of activities on the
Leased Property by the Indemnified Party in a manner that proximately causes
actual bodily injury or property damage to occur. "ACTIVE NEGLIGENCE" shall not
include (1) any negligent failure of Landlord to act when the duty to act would
not have been imposed but for Landlord's status as owner of any interest in the
Leased Property or as a party to the transactions described in this Lease, (2)
any negligent failure of any other Indemnified Party to act when the duty to act
would not have been imposed but for such party's contractual or other
relationship to Landlord or participation or facilitation in any manner,
directly or indirectly, of the transactions described in this Lease, or (3) the
exercise in a lawful manner by Landlord (or any party lawfully claiming through
or under Landlord) of any remedy provided herein or in the Purchase Agreement.
(c) Additional Rent. "ADDITIONAL RENT" shall have the
meaning assigned to it in subparagraph 3.(f) below.
(d) Advance Date. "ADVANCE DATE" means, regardless of
whether any Construction Advance shall actually be made thereon, the first
Business Day of every calendar month, beginning with September 1, 1995 and
continuing regularly thereafter to and including the Base Rent Commencement
Date. If the Base Rent Commencement Date occurs before the Last Advance Date,
then each Base Rent Date through and including the Last Advance Date shall also
constitute an "ADVANCE DATE" hereunder. In any event, the Last Advance Date
shall be the final Advance Date.
(e) Affiliate. "AFFILIATE" of any Person means any other
Person controlling, controlled by or under common control with such Person. For
purposes of this definition, the term "CONTROL" when used with respect to any
Person means the power to direct the management of policies of such Person,
directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise, and the terms "CONTROLLING" and "CONTROLLED" have meanings
correlative to the foregoing.
(f) Applicable Laws. "APPLICABLE LAWS" shall have the
meaning assigned to it in subparagraph 9.(d) below.
(g) Applicable Purchaser. "APPLICABLE PURCHASER" means any
third party designated by Tenant to purchase the Landlord's interest in the
Leased Property and in any Escrowed Proceeds as provided in the Purchase
Agreement.
(h) Attorneys' Fees. "ATTORNEYS' FEES" means the reasonable
fees and expenses of counsel to the parties incurring the same, which may
include fairly allocated costs of in-house counsel, printing, photostating,
duplicating and other expenses, air freight charges, and fees billed for law
clerks, paralegals, librarians and others not admitted to the bar but performing
services under the supervision of an attorney. Such terms shall also include,
without limitation, all such fees and expenses incurred with respect to appeals,
arbitrations and bankruptcy proceedings, and whether or not any manner or
proceeding is brought with respect to the matter for which such fees and
expenses were incurred.
(i) Base Rent. "BASE RENT" means the rent payable by Tenant
pursuant to subparagraph 3.(a) below.
(j) Base Rent Commencement Date. "BASE RENT COMMENCEMENT
DATE" means the earlier of (1) the Last Advance Date, or (2) the first Business
Day of any calendar month that occurs at least ten (10) days after Landlord has
received a notice from Tenant stating that Tenant irrevocably elects to have
Base Rent begin to accrue as soon as possible under this Lease. It is understood
that Tenant may, but shall not be required, to give such a notice at any time
Tenant would prefer to commence payment of Base Rent rather than have Carrying
Costs continue to accrue.
(k) Base Rent Date. "BASE RENT DATE" means a date upon which
Base Rent must be paid under this Lease, all of which dates shall be the first
Business Day of a calendar month. The first Base Rent Date shall be determined
as follows:
a) If a LIBOR Period Election of one month is in effect
on the Base Rent Commencement Date, then the first Business Day
of the first calendar month following the Base Rent Commencement
Date shall be the first Base Rent Date.
b) If the LIBOR Period Election in effect on the Base
Rent Commencement Date is three months or longer, then the first
Business Day of the third calendar month following the Base Rent
Commencement Date shall be the first Base Rent Date.
Each successive Base Rent Date after the first Base Rent Date shall be the first
Business Day of the first or third calendar month following the calendar month
which includes the preceding Base Rent Date, determined as follows:
a) If a LIBOR Period Election of one month is in effect
on a Base Rent Date, then the first Business Day of the first
calendar month following such Base Rent Date shall be the next
following Base Rent Date.
b) If a LIBOR Period Election of three months or longer
is in effect on a Base Rent Date, then the first Business Day of
the third calendar month following such Base Rent Date shall be
the next following Base Rent Date.
Thus, for example, if the Base Rent Commencement Date falls on June 2, 1997 and
a LIBOR Period Election of six months commences on the Base Rent Commencement
Date, then the first Base Rent Date shall be the first Business Day of
September, 1997, and the second Base Rent Date shall be the first Business Day
of December, 1997.
(l) Base Rent Period. "BASE RENT PERIOD" means a period for
which Base Rent must be paid under this Lease, each of which periods shall
correspond to the LIBOR Period Election for such period. The first Base Rent
Period shall begin on and include the Base Rent Commencement Date, and each
successive Base Rent Period shall begin on and include the Base Rent Date upon
which the preceding Base Rent Period ends. Each Base Rent Period, including the
first Base Rent Period, shall end on but not include the first, second, third or
fourth Base Rent Date after the Base Rent Date upon which such period began,
determined as follows:
a) If the LIBOR Period Election for a Base Rent Period
is one month or three months, then such Base Rent Period shall
end on the first Base Rent Date after the Base Rent Date upon
which such period began.
b) If the LIBOR Period Election for a Base Rent Period
is six months, then such Base Rent Period shall end on the
second Base Rent Date after the Base Rent Date upon which such
period began.
c) If the LIBOR Period Election for a Base Rent Period
is nine months, then such Base Rent Period shall end on the
third Base Rent Date after the Base Rent Date upon which such
period began.
d) If the LIBOR Period Election for a Base Rent Period
is twelve months, then such Base Rent Period shall end on the
fourth Base Rent Date after the Base Rent Date upon which such
period began.
The determination of Base Rent Periods can be illustrated by two examples:
1) If Tenant makes a LIBOR Period Election of three
months for a hypothetical Base Rent Period beginning on June 2,
1997, then such Base Rent Period will end on but not the include
the first Base Rent Date after June 1, 1997; that is, such Base
Rent Period will end on September 1, 1997, the first Business
Day of the third calendar month after June 2, 1997.
2) If, however, Tenant makes a LIBOR Period Election of
six months for the hypothetical Base Rent Period beginning
June 2, 1997, then such Base Rent Period will end on but not
include the second Base Rent Date after June 2, 1997; that is,
December 1, 1997.
If the Base Rent Commencement Date occurs before the Last Advance Date, then
because of the interplay of the definitions in this Lease: (1) the last day of
each Base Rent Period shall also constitute an Advance Date hereunder through
and including the Last Advance Date; (2) Base Rent Periods ending on or prior to
the Last Advance Date shall also constitute Construction Periods hereunder; and
(3) the LIBOR Period Election for any Base Rent Period ending on or prior to the
Last Advance Date shall, under the definition of LIBOR Period Election in
subparagraph 1.(bg) below, be one month, thus causing each such Base Rent Period
to be only one month.
(m) Breakage Costs. "BREAKAGE COSTS" means any and all
costs, losses or expenses incurred or sustained by Landlord's Lender or any
Participant, for which Landlord's Lender or the Participant shall expect
reimbursement from Landlord, because of the resulting liquidation or
redeployment of deposits or other funds used to make Funding Advances upon any
termination of this Lease by Tenant pursuant to Paragraph 2 below, if such
termination is effective as of any day other than the last day of a Construction
Period or Base Rent Period. Breakage Costs will include losses attributable to
any decline in LIBOR as of the effective date of termination as compared to
LIBOR used to determine the Effective Rate then in effect. (However, if
Landlord's Lender or a Participant actually receives a profit upon the
liquidation or redeployment of deposits or other funds used to make Funding
Advances, because of any increase in LIBOR, then such profit will be offset
against costs or expenses that would otherwise be charged as Breakage Costs
under this Lease.) Each determination by Landlord's Lender of Breakage Costs
shall, in the absence of clear and demonstrable error, be conclusive and binding
upon Landlord and Tenant.
(n) Business Day. "BUSINESS DAY" means any day that is (1)
not a Saturday, Sunday or day on which commercial banks are generally closed or
required to be closed in New York City, New York or San Francisco, California,
and (2) a day on which dealings in deposits of dollars are transacted in the
London interbank market; provided that if such dealings are suspended
indefinitely for any reason, "BUSINESS DAY" shall mean any day described in
clause (1).
(o) Capital Adequacy Charges. "CAPITAL ADEQUACY CHARGES"
means any additional amounts Landlord's Lender or any Participant requires
Landlord to pay as compensation for an increase in required capital as provided
in subparagraph 9.(y)(iv).
(p) Carrying Costs. "CARRYING COSTS" means the charges
(accruing at the Effective Rate) added to and made a part of the Outstanding
Construction Allowance from time to time on and before the Base Rent
Commencement Date pursuant to and as more particularly described in subparagraph
6.(b)(ii) below.
(q) Closing Costs. "CLOSING COSTS" means the costs paid from
the Initial Funding Advances in connection with the preparation and negotiation
of this Lease, the Existing Contract, the Purchase Agreement, the Pledge
Agreement, the Environmental Indemnity and related documents. To the extent that
Landlord does not itself use the entire Initial Funding Advance remaining after
payment of the purchase price for the Leased Property to pay expenses incurred
by Landlord in connection with the preparation and negotiation of such
documents, the remainder thereof will be advanced to Tenant for payment of
expenses incurred by Tenant in connection therewith, or title insurance
premiums.
(r) Change of Control Event. "CHANGE OF CONTROL EVENT" means
the occurrence of any merger or consolidation or sale of assets involving Tenant
that would constitute an "Event of Default" as defined in the Revolving Credit
Agreement.
(s) Code. "CODE" means the Internal Revenue Code of 1986, as
amended from time to time.
(t) Commitment Fee. "COMMITMENT FEE" shall have the meaning
assigned to it in subparagraph 3.(e) below.
(u) Completion Notice. "COMPLETION NOTICE" shall have the
meaning assigned to it in subparagraph 6.(e) below.
(v) Completion Deadline. "COMPLETION DEADLINE" means
March 1, 1996.
(w) Construction Advances. "CONSTRUCTION ADVANCES" means
actual advances of funds made by or on behalf of Landlord pursuant to Paragraph
6.(b)(i) below for costs incurred to construct the Initial Improvements or for
property taxes and assessments assessed against the Leased Property and paid
prior to the Last Advance Date.
(x) Construction Allowance. "CONSTRUCTION ALLOWANCE" means
the allowance, consisting of all Construction Advances and Carrying Costs, which
is to be provided by Landlord for the construction of the Initial Improvements
as more particularly described in Paragraph 6.(b) below.
(y) Construction Periods. "Construction Period" means each
successive period of approximately one (1) month, except that the first
Construction Period shall be a short period beginning on and including the
effective date hereof and ending on but not including the first Advance Date.
Each successive Construction Period after the first Construction Period shall
begin on and include the day on which the preceding Construction Period ends and
shall end on but not include the next following Advance Date, until the last
Construction Period, which shall end on but not include the Completion Date.
"Construction Periods" means all Construction Periods collectively; that is, the
period from and including the effective date hereof to but not including the
Completion Date.
(z) Custodial Agreement. "CUSTODIAL AGREEMENT" means the
Custodial Agreement dated as of the date hereof, between Banque Nationale de
Paris, New York Branch (or any successor or replacement custodian), and Tenant
pursuant to which such bank will hold securities pledged by Tenant as collateral
for Tenant's obligations under the Purchase Agreement, as such Custodial
Agreement may be extended, supplemented, amended, restated or otherwise modified
from time to time in accordance with its terms.
(aa) Debt. "DEBT" of any Person means (i) indebtedness of
such Person for borrowed money, (ii) obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments, (iii) obligations of such
Person to pay the deferred purchase price of property or services, (iv)
obligations of such Person as lessee under leases which shall have been or
should be, in accordance with GAAP, recorded as capital leases, (v) obligations
under direct or indirect guaranties in respect of, and obligations (contingent
or otherwise) to purchase or otherwise acquire, or otherwise to assure a
creditor against loss in respect of, indebtedness or obligations of others of
the kinds referred to in clauses (i) through (iv) above, (vi) liabilities of
another Person secured by a Lien on, or payable out of the proceeds of
production from, property of such Person even though such obligation shall not
be assumed by such Person (but in the case of such liabilities not assumed by
such Person, the liabilities shall constitute Debt of such Person only to the
extent of the value of such Person's property encumbered by the Lien securing
such liabilities) and (vii) Unfunded Benefit Liabilities.
(bb) Default. "DEFAULT" means any event which, with the
passage of time or the giving of notice or both, would (if not cured within any
applicable cure period) constitute an Event of Default.
(cc) Default Rate. "DEFAULT RATE" means a floating per annum
rate equal to three percent (3%) above the Prime Rate. However, in no event will
the Default Rate exceed the maximum interest rate permitted by law.
(dd) Defaulting Participant. "DEFAULTING PARTICIPANT" means
any Participant that shall have breached its Participation Agreement with
Landlord by failing to provide to Landlord Participant's percentage of the
purchase price for the Land-51 Rio Robles and the related Leased Property or any
Construction Advance requested by Tenant. (For purposes of this Lease a
"PARTICIPANT'S PERCENTAGE" shall mean the percentage that, under such
Participant's Participation Agreement with Landlord, is to be multiplied against
Construction Advances to compute the amount the Participant must advance to
Landlord for (or equal to) a percentage of Construction Advances requested
hereunder.) Notwithstanding the foregoing, however, in no event will any
Participant be a Defaulting Participant unless its Participation Agreement with
Landlord expressly makes Tenant a third party beneficiary of the applicable
Participant's promise to fund advances for (or equal to) its percentage share of
Construction Advances hereunder.
(ee) Designated Payment Date. "DESIGNATED PAYMENT DATE" shall
have the meaning assigned to it in the Purchase Agreement.
(ff) Effective Rate. "EFFECTIVE RATE" means:
(i) for each day during the first short Construction Period
ending September 1, 1995 the per annum rate which equals the Spread plus
the rate which is fifty basis points (50/100 of 1%) above the Fed Funds
Rate for that day; and
(ii) for each subsequent Construction Period and for each
Base Rent Period, the per annum rate which equals the Spread for such
Construction Period or Base Rent Period plus the per annum rate
determined by dividing (A) LIBOR for such Construction Period or Base
Rent Period, as the case may be, by (B) 100% minus the Eurodollar Rate
Reserve Percentage for such Construction Period or Base Rent Period.
If LIBOR or the Eurodollar Rate Reserve Percentage changes from Construction
Period to Construction Period or from Base Rent Period to Base Rent Period, then
the Effective Rate shall be automatically increased or decreased as of the date
of such change, as the case may be. If for any reason Landlord determines that
it is impossible or unreasonably difficult to determine the Effective Rate with
respect to a given Construction Period or Base Rent Period in accordance with
the preceding sentences, then the "EFFECTIVE RATE" for that Construction Period
or Base Rent Period shall equal the Spread plus any published index or per annum
interest rate determined reasonably and in good faith by Landlord's Lender to be
comparable to LIBOR at the beginning of the first day of that period. A
comparable interest rate might be, for example, the then existing yield on short
term United States Treasury obligations (as compiled by and published in the
then most recently published United States Federal Reserve Statistical Release
H.15(519) or its successor publication), plus or minus a fixed adjustment based
on Landlord's Lender's comparison of past eurodollar market rates to past yields
on such Treasury obligations. Any determination by Landlord of the Effective
Rate hereunder shall, in the absence of clear and demonstrable error, be
conclusive and binding.
(gg) Environmental Indemnity. "ENVIRONMENTAL INDEMNITY" means
the separate Environmental Indemnity Agreement dated as of the date hereof
executed by Tenant in favor of Landlord covering the Land and certain other
property described therein, as such agreement may be extended, supplemented,
amended, restated or otherwise modified from time to time in accordance with its
terms.
(hh) Environmental Laws. "ENVIRONMENTAL LAWS" means any and
all existing and future Applicable Laws pertaining to safety, health or the
environment, or to Hazardous Substances or Hazardous Substance Activities,
including without limitation the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended by the Superfund Amendments
and Reauthorization Act of 1986 (as amended, hereinafter called "CERCLA"), and
the Resource Conservation and Recovery Act of 1976, as amended by the Used Oil
Recycling Act of 1980, the Solid Waste Disposal Act Amendments of 1980, and the
Hazardous and Solid Waste Amendments of 1984 (as amended, hereinafter called
"RCRA").
(ii) Environmental Losses. "ENVIRONMENTAL LOSSES" means
Losses suffered or incurred by any Indemnified Party, directly or indirectly,
relating to or arising out of, based on or as a result of: (i) any Hazardous
Substance Activity; (ii) any violation of Environmental Laws relating to the
Leased Property or to the ownership, use, occupancy or operation thereof; (iii)
any investigation, inquiry, order, hearing, action, or other
proceeding by or before any governmental or quasi-governmental agency or
authority in connection with any Hazardous Substance Activity; or (iv) any
claim, demand, cause of action or investigation, or any action or other
proceeding, whether meritorious or not, brought or asserted against any
Indemnified Party which directly or indirectly relates to, arises from, is based
on, or results from any of the matters described in clauses (i), (ii), or (iii)
of this subparagraph 1.(ai), or any allegation of any such matters.
ENVIRONMENTAL LOSSES INCURRED BY OR ASSERTED AGAINST A PARTICULAR INDEMNIFIED
PARTY SHALL INCLUDE LOSSES RELATING TO OR ARISING OUT OF OR AS A RESULT OF ANY
MATTERS LISTED IN THE PRECEDING SENTENCE EVEN WHEN SUCH MATTERS ARE CAUSED BY
THE ORDINARY NEGLIGENCE (AS DEFINED BELOW) OF THAT PARTICULAR OR ANY OTHER
INDEMNIFIED PARTY. However, Losses incurred by or asserted against a particular
Indemnified Party and proximately caused by (and attributed by any applicable
principles of comparative fault to) the wilful misconduct, Active Negligence or
gross negligence of any Indemnified Party will not constitute Environmental
Losses of such Indemnified Party for purposes of this Lease.
(jj) Environmental Report. "ENVIRONMENTAL REPORT" means,
collectively, the following reports prepared by Tetra Tech, Inc, Inc. for Lund
Financial Corporation: Phase I Environmental Site Assessment for Amdahl/Fujitsu
Property, 51 and 77 Rio Robles Drive, San Jose, California and Letter Dated
July 5, 1995 to Ms. Lisbeth Ward, Banque Nationale de Paris regarding
Subsurface Soil Investigation, Amdahl/Fujitsu Buildings, 51 and 71 Rio Robles,
San Jose, and all tables, figures, certificates, appendices and other
attachments to such reports.
(kk) ERISA. "ERISA" means the Employee Retirement Income
Security Act of 1974, as amended from time to time, together with all rules and
regulations promulgated with respect thereto.
(ll) ERISA Affiliate. "ERISA AFFILIATE" means any Person who
for purposes of Title IV of ERISA is a member of Tenant's controlled group, or
under common control with Tenant, within the meaning of Section 414 of the Code,
and the regulations promulgated and rulings issued thereunder.
(mm) ERISA Termination Event. "ERISA TERMINATION EVENT" means
(i) the occurrence with respect to any Plan of a) a reportable event described
in Sections 4043(b)(5) or (6) of ERISA or b) any other reportable event
described in Section 4043(b) of ERISA other than a reportable event not subject
to the provision for 30-day notice to the Pension Benefit Guaranty Corporation
pursuant to a waiver by such corporation under Section 4043(a) of ERISA, or (ii)
the withdrawal of Tenant or any Affiliate of Tenant from a Plan during a plan
year in which it was a "SUBSTANTIAL EMPLOYER" as defined in Section 4001(a)(2)
of ERISA, or (iii) the filing of a notice of intent to terminate any Plan or the
treatment of any Plan amendment as a termination under Section 4041 of ERISA, or
(iv) the institution of proceedings to terminate any Plan by the Pension Benefit
Guaranty Corporation under Section 4042 of ERISA, or (v) any other event or
condition which might constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan.
(nn) Escrowed Proceeds. "ESCROWED PROCEEDS" shall mean any
proceeds that are received by Landlord from time to time during the Term (and
any interest earned thereon), which Landlord is holding for the purposes
specified in the next sentence, from any party (1) under any casualty insurance
policy as a result of damage to the Leased Property, (2) as compensation for any
restriction placed upon the use or development of the Leased Property or for the
condemnation of the Leased Property or any portion thereof, (3) because of any
judgment, decree or award for injury or damage to the Leased Property or (4)
under any title insurance policy or otherwise as a result of any title defect or
claimed title defect with respect to the Leased Property; provided, however, in
determining "ESCROWED PROCEEDS" there shall be deducted all expenses and costs
of every type, kind and nature (including Attorneys' Fees) incurred by Landlord
to collect such proceeds; and provided, further, "ESCROWED PROCEEDS" shall not
include any payment to Landlord by a Participant or an Affiliate of Landlord
that is made to compensate Landlord for the Participant's or Affiliate's share
of any Losses Landlord
may incur as a result of any of the events described in the preceding clauses
(1) through (4). "ESCROWED PROCEEDS" shall include only such proceeds as are
held by Landlord (A) pursuant to Paragraph 4 for the payment to Tenant for the
restoration or repair of the Leased Property or (B) for application (generally,
on the next following Advance Date or Base Rent Date which is at least three (3)
Business Days following Landlord's receipt of such proceeds) as a Qualified
Payment or as reimbursement of costs incurred in connection with a Qualified
Payment. "ESCROWED PROCEEDS" shall not include any proceeds that have been
applied as a Qualified Payment or to pay any costs incurred in connection with a
Qualified Payment. Until Escrowed Proceeds are paid to Tenant pursuant to
Paragraph 4 below or applied as a Qualified Payment or as reimbursement for
costs incurred in connection with a Qualified Payment, Landlord shall keep the
same deposited in an interest bearing account established in Landlord's name,
and all interest earned on such account shall be added to and made a part of
Escrowed Proceeds.
(oo) Eurocurrency Liabilities. "EUROCURRENCY LIABILITIES" has
the meaning assigned to that term in Regulation D of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
(pp) Eurodollar Rate Reserve Percentage. "EURODOLLAR RATE
RESERVE PERCENTAGE" means, for purposes of determining the Effective Rate for
any Construction Period or Base Rent Period, the reserve percentage applicable
two Business Days before the first day of such Construction Period or Base Rent
Period under regulations issued from time to time by the Board of Governors of
the Federal Reserve System (or any successor) for determining the maximum
reserve requirement (including, but not limited to, any emergency, supplemental
or other marginal reserve requirement) for a member bank of the Federal Reserve
System in New York City with deposits exceeding One Billion Dollars with respect
to liabilities or deposits consisting of or including Eurocurrency Liabilities
(or with respect to any other category or liabilities by reference to which
LIBOR is determined) having a term comparable to such Construction Period or
Base Rent Period.
(qq) Event of Default. "EVENT OF DEFAULT" shall have the
meaning assigned to it in subparagraph 14.(a) below.
(rr) Excluded Taxes. "EXCLUDED TAXES" shall mean (1) all
federal, state and local income taxes upon the Base Rent, the Upfront Fee,
Administrative Fees, Commitment Fees and any interest paid to Landlord pursuant
to subparagraph 3.(g), (2) any taxes imposed by any governmental authority
outside the United States, and (3) any transfer or change of ownership taxes
assessed because of Landlord's transfer or conveyance to any third party of any
rights or interest in the Lease, the Purchase Agreement or the Leased Property,
but excluding any such taxes assessed because of any Permitted Transfer to a
Participant or because of any Permitted Transfer described in clause (4) of the
definition of Permitted Transfer below.
(ss) Fair Market Value. "FAIR MARKET VALUE" shall have the
meaning assigned to it in the Purchase Agreement.
(tt) Fed Funds Rate. "FED FUNDS RATE" means, for any period,
a fluctuating interest rate (expressed as a per annum rate and rounded upwards,
if necessary, to the next 1/16 of 1%) equal for each day during such period to
the weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if such
rates are not so published for any day which is a Business Day, the average of
the quotations for such day on such transactions received by the Landlord's
Lender from three Federal funds brokers of recognized standing selected by
Landlord's Lender. All determinations of the Fed Funds Rate by Landlord's Lender
shall, in the absence of clear and demonstrable error, be binding and conclusive
upon Landlord and Tenant.
(uu) Funding Advances. "FUNDING ADVANCES" means (1) the
Initial Funding Advances and (2) all future advances (which, together with
Initial Funding Advances, are expected to total $15,400,000) made by Landlord's
Lender or any Participant to or on behalf of Landlord to allow Landlord to
provide the Construction Allowance hereunder.
(vv) GAAP. "GAAP" means generally accepted accounting
principles in the United States of America as in effect from time to time,
applied on a basis consistent with those used in the preparation of the
financial statements referred to in subparagraph 9.(w) (except for changes
concurred in by Tenant's independent public accountants).
(ww) Hazardous Substance. "HAZARDOUS SUBSTANCE" means (i) any
chemical, compound, material, mixture or substance that is now or hereafter
defined or listed in, regulated under, or otherwise classified pursuant to, any
Environmental Laws as a "hazardous substance," "hazardous material," "hazardous
waste," "extremely hazardous waste," "infectious waste," "toxic substance,"
"toxic pollutant," or any other formulation intended to define, list or classify
substances by reason of deleterious properties, including, without limitation,
ignitability, corrosiveness, reactivity, carcinogenicity, toxicity or
reproductive toxicity; (ii) petroleum, any fraction of petroleum, natural gas,
natural gas liquids, liquified natural gas, synthetic gas usable for fuel (or
mixtures of natural gas and such synthetic gas), and ash produced by a resource
recovery facility utilizing a municipal solid waste stream, and drilling fluids,
produced waters and other wastes associated with the exploration, development or
production of crude oil, natural gas or geothermal resources; (iii) asbestos and
any asbestos containing material; (iv) "waste" as defined in section 13050(d) of
the California Water Code; and (v) any other material that, because of its
quantity, concentration or physical or chemical characteristics, poses a
significant present or potential hazard to human health or safety or to the
environment if released into the workplace or the environment.
(xx) Hazardous Substance Activity. "HAZARDOUS SUBSTANCE
ACTIVITY" means any actual, proposed or threatened use, storage, holding,
existence, location, release (including, without limitation, any spilling,
leaking, leaching, pumping, pouring, emitting, emptying, dumping, disposing into
the environment, and the continuing migration into or through soil, surface
water, groundwater or any body of water), discharge, deposit, placement,
generation, processing, construction, treatment, abatement, removal, disposal,
disposition, handling or transportation of any Hazardous Substance from, under,
in, into or on the Leased Property, including, without limitation, the movement
or migration of any Hazardous Substance from surrounding property, surface
water, groundwater or any body of water under, in, into or onto the Leased
Property and any residual Hazardous Substance contamination in, on or under the
Leased Property.
(yy) Impositions. "IMPOSITIONS" shall have the meaning
assigned to it in subparagraph 9.(p) below.
(zz) Improvements. "IMPROVEMENTS," as defined in the recitals
at the beginning of this Lease, shall include not only existing improvements to
the Land as of the effective date of this Lease, if any, but also any new
improvements or changes to existing improvements made by Tenant. Accordingly,
any and all new improvements made to the Leased Property by Tenant using the
Construction Allowance as contemplated in this Lease shall constitute
Improvements as that term is used herein.
(aaa) Indemnified Party. "INDEMNIFIED PARTY" means each of (1)
Landlord, any of Landlord's successors and any of Landlord's assigns to the
extent that the transfer to such assigns was permitted hereunder, as to all or
any portion of the Leased Property or any interest therein (but excluding Tenant
or any Applicable Purchaser under the Purchase Agreement or any Person that
claims its interest in the Leased Property through or under Tenant or such
Applicable Purchaser), (2) any Participants, and (3) any Affiliate, officer,
agent, director, employee or servant of any of the parties described in clause
(1) or (2) preceding.
(bbb) Initial Funding Advances. "INITIAL FUNDING ADVANCES"
means the Initial Funding Allowance-77 Rio Robles, which has been advanced on or
before the effective date of this Lease, and the Initial Funding Advance-51 Rio
Robles, which is expected to be advanced on or before the date Landlord acquires
the Land-51 Rio Robles. "INITIAL FUNDING ADVANCE-77 RIO ROBLES" means the
advance in the amount of $5,977,000 made by Landlord's Lender to finance the
cost of Landlord's acquisition of the Land-77 Rio Robles and related Leased
Property and certain Closing Costs incurred in connection therewith. "INITIAL
FUNDING ADVANCE-51 RIO ROBLES" means the advance (expected to be in the amount
of $4,825,000 plus related Closing Costs) which Landlord will obtain from
Landlord's Lender to finance the cost of Landlord's acquisition of the Land-51
Rio Robles and related Leased Property and certain Closing Costs which may be
incurred in connection therewith. As used in this Lease, the "INITIAL FUNDING
ADVANCES OUTSTANDING" or words of like effect shall mean (1) the Initial Funding
Advance-77 Rio Robles until Landlord acquires the Land-51 Rio Robles, and (2)
the sum of the Initial Funding Advance-77 Rio Robles plus the Funding Advance-51
Rio Robles after Landlord acquires the Land-51 Rio Robles.
(ccc) Initial Improvements. "INITIAL IMPROVEMENTS" shall mean
the improvements on the Land and any furnishings for such improvements which are
to be constructed and installed by Tenant using the Construction Allowances
described in Paragraph 6.(b) below.
(ddd) Landlord's Lender. "LANDLORD'S LENDER" means Landlord's
Affiliate, Banque Nationale de Paris, a bank organized and existing under the
laws of France, together with any Affiliates of such bank that directly or
indirectly provided or hereafter during the Term provide or maintain any of the
Funding Advances, and any successors of such bank and such Affiliates.
(eee) Last Advance Date. "LAST ADVANCE DATE" means the earlier
of (1) the Completion Deadline, or (2) the Designated Payment Date under the
Purchase Agreement, or (3) the first Business Day of any calendar month that
occurs at least ten (10) days after Landlord has received a Completion Notice or
Notice of Last Advance from Tenant.
(fff) LIBOR. "LIBOR" means, for purposes of determining the
Effective Rate for each Construction Period and Base Rent Period, the rate
determined by Landlord's Lender to be the average rate of interest per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) of the rates at which
deposits of dollars are offered or available to Landlord's Lender in the London
interbank market at approximately 11:00 a.m. (London time) on the second
Business Day preceding the first day of such Construction Period or Base Rent
Period, as the case may be. Landlord shall instruct Landlord's Lender to
consider deposits, for purposes of making the determination described in the
preceding sentence, that are offered: (i) for delivery on the first day of such
Construction Period or Base Rent Period, (ii) in an amount equal or comparable
to the total (projected on the applicable date of determination by Landlord's
Lender) Stipulated Loss Value on the first day of such Construction Period or
Base Rent Period, and (iii) for a period of time equal or comparable to the
length of such Construction Period or Base Rent Period. If Landlord's Lender so
chooses, it may determine LIBOR for any period by reference to the rate reported
by the British Banker's Association on Page 3750 of the Telerate Service at
approximately 11:00 a.m. (London time) on the second Business Day preceding the
first day of such period; provided, however, Tenant may notify Landlord that
Tenant objects to any future determination of LIBOR in the manner provided by
this sentence, in which case any determination of LIBOR required more than three
Business Days after Landlord's receipt of such notice shall be made as if this
sentence had been struck from this Lease. If for any reason Landlord's Lender
determines that it is impossible or unreasonably difficult to determine LIBOR
with respect to a given Construction Period or Base Rent Period in accordance
with the preceding sentences, or if Landlord's Lender shall determine that it is
unlawful (or any central bank or governmental authority shall assert that it is
unlawful) for Landlord, Landlord's Lender or any Participant to provide Funding
Advances hereunder during any Base Rent Period for which Base Rent is computed
by reference to LIBOR, then "LIBOR"
for that Construction Period or Base Rent Period shall equal the rate which is
fifty basis points (50/100 of 1%) above the Fed Funds Rate for that period. All
determinations of LIBOR by Landlord's Lender shall, in the absence of clear and
demonstrable error, be binding and conclusive upon Landlord and Tenant.
(ggg) LIBOR Period Election. The "LIBOR PERIOD ELECTION" for
any Base Rent Period means a period of one month, three months, six months, nine
months or twelve months as designated by Tenant at least ten (10) Business Days
prior to the commencement of such Base Rent Period by a written notice given to
Landlord in the form of Exhibit J attached hereto. (For purposes of this Lease a
LIBOR Period Election for any Base Rent Period shall also be considered the
LIBOR Period Election in effect on (1) the Base Rent Commencement Date or Base
Rent Date upon which such Base Rent Period begins and (2) subsequent Base Rent
Dates, if any, which occur before the date upon which such Base Rent Period
ends.) Any Libor Period Election so designated by Tenant shall remain in effect
for the entire Base Rent Period specified in Tenant's notice to Landlord
(provided such Base Rent Period commences at least ten (10) Business Days after
Landlord's receipt of the notice) and for all subsequent Base Rent Periods until
a new designation becomes effective in accordance with the provisions set forth
in this paragraph. Notwithstanding the foregoing, however: (1) Tenant shall not
be entitled to designate a LIBOR Period Election that would cause a Base Rent
Period to extend beyond the end of the scheduled Term; (2) changes in the LIBOR
Period Election shall become effective only upon the commencement of a new Base
Rent Period; (3) if Tenant fails to make a LIBOR Period Election in accordance
with the foregoing requirements for any Base Rent Period, or if an Event of
Default shall have occurred and be continuing on the third Business Day
preceding the commencement of any Base Rent Period, the LIBOR Period Election
for such Base Rent Period shall be deemed to be one month; and (4) for any Base
Rent Period which ends on or prior to the Last Advance Date, the LIBOR Period
Election shall be deemed to be one month.
(hhh) Lien. "LIEN" means any mortgage, pledge, security
interest, encumbrance, lien or charge of any kind (including any agreement to
give any of the foregoing, any conditional sale or other title retention
agreement, any agreement to sell receivables with recourse, any lease in the
nature thereof, and the filing of or agreement to give any financing statement
under the Uniform Commercial Code of any jurisdiction). Customary bankers'
rights of set-off arising by operation of law or by contract (however styled, if
the contract grants rights no greater than those arising by operation of law) in
connection with working capital facilities, lines of credit, term loans and
letter of credit facilities and other contractual arrangements entered into with
banks in the ordinary course of business are not "Liens" for the purposes of
this Lease.
(iii) Losses. "LOSSES" means any and all losses, liabilities,
damages (whether actual, consequential, punitive or otherwise denominated),
demands, claims, actions, judgments, causes of action, assessments, fines,
penalties, costs, and out-of-pocket expenses (including, without limitation,
Attorneys' Fees and the fees of outside accountants and environmental
consultants), of any and every kind or character, foreseeable and unforeseeable,
liquidated and contingent, proximate and remote, known and unknown.
(jjj) Maximum Construction Allowance. "MAXIMUM CONSTRUCTION
ALLOWANCE" means (i) until Landlord acquires the Land-51 Rio Robles, an amount
equal to $8,309,500 less the Initial Funding Advance-77 Rio Robles, and (ii)
thereafter, $15,400,000.00, less the Initial Funding Advances.
(kkk) Notice of Last Advance. "NOTICE OF LAST ADVANCE" means
any notice given by Tenant to Landlord stating that Tenant irrevocably elects
not to request or accept any further Construction Advances which Tenant might be
entitled to but for such election. It is understood that Tenant may, but shall
not be required, to give a Notice of Last Advance in order to accelerate the
Last Advance Date and to thereby accelerate the date upon which Commitment Fees
shall cease to accrue.
(lll) Ordinary Negligence. "ORDINARY NEGLIGENCE" of an
Indemnified Party means any negligent acts or omissions of such party that does
not for any reason constitute Active Negligence as defined in this Lease.
(mmm) Outstanding Construction Allowance. "OUTSTANDING
CONSTRUCTION ALLOWANCE" shall have the meaning assigned to it in subparagraph
6.(b)(i).
(nnn) Participant. "PARTICIPANT" means any Person other than
Landlord that agrees with Landlord or another Participant to participate in all
or some of the risks and rewards to Landlord of this Lease and the Purchase
Agreement. As of the effective date hereof, there are no Participants, but
Landlord may through a Permitted Transfer (and only through a Permitted
Transfer) share in risks and rewards of this Lease and the Purchase Agreement
with Participants in the future.
(ooo) Participation Agreements. "PARTICIPATION AGREEMENTS"
means participation agreements between Landlord and one or more third parties,
pursuant to which the third party or parties become Participants by agreeing to
participate in all or some of the risks and rewards to Landlord of this Lease
and the Purchase Agreement, as such Participation Agreements may be extended,
supplemented, amended, restated or otherwise modified from time to time.
(ppp) Permitted Encumbrances. "PERMITTED ENCUMBRANCES" means
(i) the encumbrances and other matters affecting the Leased Property that are
set forth in Exhibit B attached hereto and made a part hereof, and (ii) any
provisions of the Existing Contract that survive closing thereunder, and (iii)
any easement agreement or other document affecting title to the Leased Property
executed by Landlord pursuant to the Existing Contract or otherwise executed by
Landlord at the request of or with the consent of Tenant.
(qqq) Permitted Hazardous Substance Use. "PERMITTED HAZARDOUS
SUBSTANCE USE" means the use, storage and offsite disposal of Permitted
Hazardous Substances in strict accordance with applicable Environmental Laws and
with due care given the nature of the Hazardous Substances involved; provided,
the scope and nature of such use, storage and disposal shall not include the use
of underground storage tanks for any purpose other than the storage of water for
fire control, nor shall such scope and nature:
(1) exceed that reasonably required for the construction of the Initial
Improvements and any other Improvements permitted by this Lease and for
the operation of the Leased Property for the purposes expressly
permitted under subparagraph 8.(a); or
(2) include any disposal, discharge or other release of Hazardous
Substances from operations on the Leased Property in any manner that
might allow such substances to reach the San Francisco Bay, surface
water or groundwater, except (i) through a lawful and properly
authorized discharge (A) to a publicly owned treatment works or (B) with
rainwater or storm water runoff in accordance with Applicable Laws and
any permits obtained by Tenant that govern such runoff; or (ii) any such
disposal, discharge or other release of Hazardous Substances for which
no permits are required and which are not otherwise regulated under
applicable Environmental Laws.
Further, notwithstanding anything to the contrary herein contained, Permitted
Hazardous Substance Use shall not include any use of the Leased Property as a
treatment, storage or disposal facility (as defined by federal Environmental
Laws) for Hazardous Substances, including but not limited to a landfill,
incinerator or other waste disposal facility.
(rrr) Permitted Hazardous Substances. "PERMITTED HAZARDOUS
SUBSTANCES" means Hazardous Substances used and reasonably required for the
construction of the Initial Improvements or for Tenant's
operation of the Leased Property for the purposes expressly permitted by
subparagraph 8.(a), in either case in strict compliance with all Environmental
Laws and with due care given the nature of the Hazardous Substances involved.
Without limiting the generality of the foregoing, Permitted Hazardous Substances
shall include, without limitation, usual and customary office and janitorial
products, and the materials listed on Exhibit H attached hereto.
(sss) Permitted Transfer. "PERMITTED TRANSFER" means any one
or more of the following: (1) any assignment or conveyance by Landlord of any
lien or security interest against the Leased Property (in contrast to a
conveyance of Landlord's fee estate in the Leased Property ) or of any of
Landlord's interest in Rent, payments required by the Purchase Agreement or
payments to be generated from the Leased Property after the Term, to any Person
not an Affiliate of Landlord that is approved in advance by Tenant as a
Participant (which approval shall not be unreasonably withheld for any proposed
Participant that is a commercial bank operating in the United States of America
having capital and surplus in excess of $500,000,000 or for any Affiliate of
such a bank) or to any Person that is an Affiliate of Landlord but is not
classified as a special purpose entity under GAAP as it pertains to the
characterization of this Lease as an operating lease; (2) any agreement to
exercise or refrain from exercising rights or remedies hereunder or under the
Purchase Agreement, the Pledge Agreement or the Environmental Indemnity made by
Landlord with any Participant or Affiliate of Landlord; (3) any assignment or
conveyance by Landlord requested by Tenant or required by any Permitted
Encumbrance, by the Existing Contract, by the Purchase Agreement or by
Applicable Laws; (4) any assignment or conveyance by Landlord when an Event of
Default shall have occurred and be continuing; or (5) any assignment or
conveyance by Landlord after the Designated Payment Date.
(ttt) Person. "PERSON" means an individual, a corporation, a
partnership, an unincorporated organization, an association, a joint stock
company, a joint venture, a trust, an estate, a government or agency or
political subdivision thereof or other entity, whether acting in an individual,
fiduciary or other capacity.
(uuu) Plan. "PLAN" means at any time an employee pension
benefit plan which is covered under Title IV of ERISA or subject to the minimum
funding standards under Section 412 of the Code and is either (i) maintained by
Tenant or any Subsidiary for employees of Tenant or any Subsidiary or (ii)
maintained pursuant to a collective bargaining agreement or any other
arrangement under which more than one employer makes contributions and to which
Tenant or any Subsidiary is then making or accruing an obligation to make
contributions or has within the preceding five plan years made contributions.
(vvv) Pledge Agreement. "PLEDGE AGREEMENT" means the Pledge
Agreement dated as of the date hereof between Landlord and Tenant pursuant to
which Tenant may pledge securities as collateral for Tenant's obligations under
the Purchase Agreement, as such Pledge Agreement may be extended, supplemented,
amended, restated or otherwise modified from time to time.
(www) Potential Lien Claimants. "POTENTIAL LIEN CLAIMANTS"
shall have the meaning assigned to it in subparagraph 6.(d)(v).
(xxx) Prime Rate. "PRIME RATE" means the prime interest rate
or equivalent charged by Landlord's Lender in the United States as announced or
published by Landlord's Lender from time to time, which need not be the lowest
interest rate charged by Landlord's Lender. If for any reason Landlord's Lender
does not announce or publish a prime rate or equivalent, the prime rate or
equivalent announced or published by either Citibank, N.A. or Credit Commercial
de France as selected by Landlord shall be used as the Prime Rate. The prime
rate or equivalent announced or published by such bank need not be the lowest
rate charged by it. The Prime Rate may change from time to time after the date
hereof without notice to Tenant as of the effective time of each change in rates
described in this definition.
(yyy) Purchase Agreement. "PURCHASE AGREEMENT" means the
Purchase Agreement dated as of the date hereof between Landlord and Tenant
pursuant to which Tenant has agreed to purchase or to arrange for the purchase
by a third party of the Leased Property, as such Purchase Agreement may be
extended, supplemented, amended, restated or otherwise modified from time to
time in accordance with its terms.
(zzz) Qualified Payments. "QUALIFIED PAYMENTS" means all
payments received by Landlord from time to time during the Term from any party
(1) under any casualty insurance policy as a result of damage to the Leased
Property, (2) as compensation for any restriction placed upon the use or
development of the Leased Property or for the condemnation of the Leased
Property or any portion thereof, (3) because of any judgment, decree or award
for injury or damage to the Leased Property or (4) under any title insurance
policy or otherwise as a result of any title defect or claimed title defect with
respect to the Leased Property; provided, however, that (x) in determining
Qualified Payments, there shall be deducted all expenses and costs of every
kind, type and nature (including taxes and Attorneys' Fees) incurred by Landlord
with respect to the collection of such payments, (y) Qualified Payments shall
not include any payment to Landlord by a Participant or an Affiliate of Landlord
that is made to compensate Landlord for the Participant's or Affiliate's share
of any Losses Landlord may incur as a result of any of the events described in
the preceding clauses (1) through (4) and (z) Qualified Payments shall not
include any payments received by Landlord that Landlord has paid to Tenant for
the restoration or repair of the Leased Property or that Landlord is holding as
Escrowed Proceeds. For purposes of computing the total Qualified Payments (and
other amounts dependent upon Qualified Payments, such as Stipulated Loss Value
and the Outstanding Construction Allowance) paid to or received by Landlord as
of any date, payments described in the preceding clauses (1) through (4) will be
considered as Escrowed Proceeds, not Qualified Payments, until they are actually
applied as Qualified Payments by Landlord, which Landlord will do upon the first
Advance Date or Base Rent Date which is at least three (3) Business Days after
Landlord's receipt of the same unless postponement of such application is
required by other provisions of this Lease or consented to by Tenant in writing.
Thus, for example, condemnation proceeds actually received by Landlord in the
middle of a Base Rent Period will not be considered as having been received by
Landlord for purposes of computing the total Qualified Payments unless and until
actually applied by Landlord as a Qualified Payment on a subsequent Base Rent
Date in accordance with Paragraph 4 below.
(aaaa) Remaining Proceeds. "REMAINING PROCEEDS" shall have the
meaning assigned to it in subparagraph 4.(a)(ii).
(bbbb) Rent. "RENT" means the Base Rent and all Additional
Rent.
(cccc) Responsible Financial Officer. "RESPONSIBLE FINANCIAL
OFFICER" means the chief financial officer, the controller, the treasurer or the
assistant treasurer of Tenant.
(dddd) Revolving Credit Agreement. "REVOLVING CREDIT AGREEMENT"
shall have the meaning assigned to it in subparagraph 9.(ac) below.
(eeee) Scope Change. A "SCOPE CHANGE" means a material addition
to, deletion from or other modification to the quality, function or capacity of
the Initial Improvements as delineated in any plans and specifications therefor
previously approved by Landlord, but shall not include refinement, correction
and detailing by Tenant or Tenant's architects or contractors from time to time.
As used in this definition, a "MATERIAL" change includes any change that (a) is
reasonably likely to substantially reduce the fair market value of the Leased
Property (after completion of the Initial Improvements), or (b) will change the
general character of the Initial Improvements from that described in any plans
or specifications approved by Landlord.
(ffff) Spread. "SPREAD" means, for purposes of determining the
Effective Rate for each Construction Period and Base Rent Period, the difference
between (1) eighty-seven and one-half basis points
(87.5/100 of 1%), less (2) the product of (a) sixty-two and one-half basis
points (62.5/100 of 1%) times (b) the Collateral Percentage (as defined below)
in effect for such Construction Period or Base Rent Period. As used in this
Lease, "COLLATERAL PERCENTAGE" means the Collateral Percentage determined under
(and as defined in) the Pledge Agreement; provided, however, for purposes of
this Lease, the Collateral Percentage for any Construction Period or Base Rent
Period shall not exceed a fraction; the numerator of which fraction shall equal
the Market Value (as defined below) of all collateral (a) that is, on the first
day of such Construction Period or Base Rent Period, held by the Custodian under
the Custodial Agreement subject to a Qualifying Security Interest (as defined
below), (b) that is free from claims or security interests held or asserted by
any third party, and (c) with respect to which Tenant shall have satisfied the
requirements of Section 2.3 of the Pledge Agreement; and the denominator of
which fraction shall equal the Stipulated Loss Value on the first day of such
Construction Period or Base Rent Period (computed after the addition of any
Construction Advance made on such first day, after the addition of all Carrying
Costs for prior Construction Periods, and after the subtraction of any Qualified
Payments applied on such first day), but in no event shall such fraction exceed
1.0/1.0. As used in this paragraph, "MARKET VALUE" means, for purposes of
determining the Collateral Percentage for each Construction Period and Base Rent
Period, the Market Value determined in accordance with (and as defined in) the
Pledge Agreement on the Valuation Date (as defined in the Custodial Agreement)
upon which such Construction Period or Base Rent Period commences or, if such
Construction Period or Base Rent Period does not commence upon a Valuation Date,
on the most recent Valuation Date prior to the commencement of such period. As
used in this paragraph, "QUALIFYING SECURITY INTEREST" means a first priority
perfected security interest under the Pledge Agreement which is sufficient, for
purposes of the laws and regulations which govern minimum amounts of capital
that Landlord and Participants or their affiliates must maintain, to permit them
to assign a twenty percent risk weighting to a portion of their collective
investment in the Property equal to the Market Value of the collateral
encumbered by such an interest.
(gggg) Stipulated Loss Value. "STIPULATED LOSS VALUE" means the
amount computed from time to time in accordance with the formula specified in
this definition. Such amount shall equal the Initial Funding Advances
outstanding as of the relevant date, PLUS the Outstanding Construction Allowance
as of such date, LESS the amount (if any) of Qualified Payments paid to Landlord
on or prior to such date that have not been deducted in calculating the
Outstanding Construction Allowance. Thus, for example, if a determination of
Stipulated Loss Value is required under subparagraph 3.(b) on the first day of
the applicable Base Rent Period, and if the Initial Funding Advances have been
made and Tenant has used the entire Construction Allowance to make the Initial
Improvements to the Leased Property, but the Leased Property has been damaged by
fire or other casualty with the result that $5,000,000 of net insurance proceeds
have been paid to Landlord and retained by Landlord as Qualified Payments, then
the Stipulated Loss Value as of the date of the required determination shall be
$10,400,000. Under no circumstances will any payment of Base Rent or the Upfront
Fee, Administrative Fees or Commitment Fees reduce Stipulated Loss Value.
(hhhh) Subsidiary. "SUBSIDIARY" means any corporation of which
Tenant and/or its other Subsidiaries own, directly or indirectly, such number of
outstanding shares as have more than 50% of the ordinary voting power for the
election of directors.
(iiii) Tenant's Knowledge. "TENANT'S KNOWLEDGE," "TO THE
KNOWLEDGE OF TENANT" and words of like effect means the actual knowledge (with
due investigation) of any of the following employees of Tenant: Christopher
Stoddart, Treasurer; Robert Boehlke, Chief Financial Officer; and Gerald B.
Campbell, Facilities Manager. However, to the extent Tenant's knowledge after
the date hereof may become relevant hereunder or under any certificate or other
notice provided by Tenant to Landlord in connection with this Lease, "Tenant's
knowledge" and words of like effect shall include the then actual knowledge of
other employees of Tenant (if any) that have assumed responsibilities of the
current employees listed in the preceding sentence or that have replaced such
current employees. But none of the employees of Tenant whose knowledge is now or
may hereafter be relevant shall be personally liable for the representations of
Tenant made herein.
(jjjj) Term. "TERM" shall have the meaning assigned to it in
Paragraph 2 below.
(kkkk) Unfunded Benefit Liabilities. "UNFUNDED BENEFIT
LIABILITIES" means, with respect to any Plan, the amount (if any) by which the
present value of all benefit liabilities (within the meaning of Section
4001(a)(16) of ERISA) under the Plan exceeds the fair market value of all Plan
assets allocable to such benefit liabilities, as determined on the most recent
valuation date of the Plan and in accordance with the provisions of ERISA for
calculating the potential liability of Tenant or any ERISA Affiliate of Tenant
under Title IV of ERISA.
(llll) Upfront Fee. "UPFRONT FEE" shall have the meaning
assigned to it in subparagraph 3.(c) below.
(mmmm) Other Terms and References. Words of any gender used in
this Lease shall be held and construed to include any other gender, and words in
the singular number shall be held to include the plural and vice versa, unless
the context otherwise requires. References herein to Paragraphs, subparagraphs
or other subdivisions shall refer to the corresponding Paragraphs, subparagraphs
or subdivisions of this Lease, unless specific reference is made to another
document or instrument. References herein to any Schedule or Exhibit shall refer
to the corresponding Schedule or Exhibit attached hereto, which shall be made a
part hereof by such reference. All capitalized terms used in this Lease which
refer to other documents shall be deemed to refer to such other documents as
they may be renewed, extended, supplemented, amended or otherwise modified from
time to time, provided such documents are not renewed, extended or modified in
breach of any provision contained herein or therein or, in the case of any other
document to which Landlord is a party or of which Landlord is an intended
beneficiary, without the consent of Landlord. All accounting terms not
specifically defined herein shall be construed in accordance with GAAP. The
words "THIS LEASE", "HEREIN", "HEREOF", "HEREBY", "HEREUNDER" and words of
similar import refer to this Lease as a whole and not to any particular
subdivision unless expressly so limited. The phrases "THIS PARAGRAPH" and "THIS
SUBPARAGRAPH" and similar phrases refer only to the Paragraphs or subparagraphs
hereof in which the phrase occurs. The word "OR" is not exclusive. Other
capitalized terms are defined in the provisions that follow.
3. Term. The term of this Lease (herein called the "TERM") shall
commence on and include (i) with respect to the Land-77 Rio Robles and the
related Leased Property, the date hereof, and (ii) with respect to the Land-51
Rio Robles and the related Leased Property, the date of Landlord's acquisition
thereof. The Term shall end with respect to all Leased Property at 8:00 A.M. on
August 1, 2000 (or the next following Business Day if August 1, 2000 is not a
Business Day), unless extended or sooner terminated as herein provided.
Notwithstanding any other provision of this Lease which may expressly restrict
the early termination hereof, and provided that Tenant is still in possession of
the Leased Property and has not breached its obligation to make or have made any
payment required by Paragraph 2 of the Purchase Agreement on any prior
Designated Payment Date, Tenant may notify Landlord of Tenant's election to
terminate this Lease by giving Landlord an irrevocable notice of such election
and of the effective date of the termination, which notice must be given (if at
all) at least sixty (60) days prior to the effective date of the termination. If
Tenant elects to so terminate this Lease, then on the date on which this Lease
is to be terminated, not only must Tenant pay all unpaid Rent, Tenant must also
pay any Breakage Costs resulting from the termination and must satisfy its
obligations under the Purchase Agreement. The payment of any unpaid Rent and
Breakage Costs and the satisfaction of Tenant's obligations under the Purchase
Agreement shall be conditions precedent to the effectiveness of any early
termination of this Lease by Tenant. All provisions of this Lease which by the
terms hereof survive the termination of this Lease, shall continue in full force
and effect and shall be unaffected by the early termination provided for in this
Paragraph.
4. Rent.
(a) Base Rent Generally. Tenant shall pay Landlord rent
(herein called "BASE RENT") in arrears, in currency that at the time of payment
is legal tender for public and private debts in the United States of America, in
installments on each Base Rent Date through the end of the Term. Each payment of
Base Rent must be received by Landlord no later that 12:00 noon (San Francisco
time) on the date it becomes due; if received after 12:00 noon it will be
considered for purposes of this Lease as received on the next following Business
Day. The Base Rent payable on the first Base Rent Date shall represent rent for
the period from the Base Rent Commencement Date to the first Base Rent Date.
Each subsequent installment of Base Rent shall represent rent allocable to the
period ending on the Base Rent Date on which the installment is due and
beginning on the preceding Base Rent Date. After the Base Rent Commencement
Date, Landlord shall notify Tenant in writing of the Base Rent payable for each
Base Rent Period or portion thereof at least fifteen (15) days prior to the Base
Rent Date on which such Base Rent is actually due. Any failure by Landlord to so
notify Tenant shall not constitute a waiver of Landlord's right to payment, but
absent such notice Tenant shall not be in default for any underpayment resulting
therefrom if Tenant, in good faith, reasonably estimates the payment required,
makes a timely payment of the amount so estimated and corrects any underpayment
within three (3) Business Days after being notified by Landlord of the
underpayment. If Tenant or any other Applicable Purchaser purchases Landlord's
interest in the Leased Property after the Base Rent Commencement Date pursuant
to the Purchase Agreement, any Base Rent for the period ending on the date of
purchase (including, if the date of Purchase is not a Base Rent Date, a pro
rated portion of the Base Rent which would become due on the next Base Rent Date
but for the purchase) and all outstanding Additional Rent shall be due on the
Designated Payment Date in addition to the purchase price and other sums due
Landlord under the Purchase Agreement.
(b) Calculation of Base Rent. Payments of Base Rent shall be
calculated and become due as follows:
(i) For all Base Rent Periods subject to a LIBOR Period
Election of one month or three months, all Base Rent shall be due on the
Base Rent Date upon which the Base Rent Period ends. The Base Rent for
each such Base Rent Period shall equal (A) Stipulated Loss Value on the
first day of such Base Rent Period, times (B) the Effective Rate with
respect to such Base Rent Period, times (C) the number of days in such
Base Rent Period, divided by (D) three hundred sixty (360).
(ii) For Base Rent Periods subject to a LIBOR Period Election
of greater than three months, Base Rent shall be payable in more than
one installment, with an installment becoming due on (1) each Base Rent
Date that occurs during the Base Rent Period (other than the Base Rent
Date upon which the Base Rent Period begins) and (2) the Base Rent Date
upon which the Base Rent Period ends. The amount of each installment
shall equal (A) Stipulated Loss Value on the first day of such Base Rent
Period, times (B) the Effective Rate with respect to such Base Rent
Period, times (C) the number of days in the period from and including
the preceding Base Rent Date to but not including the Base Rent Date
upon which the installment is due, divided by (D) three hundred sixty
(360).
Assume, only for the purpose of illustration: that the Initial Funding Advances
were made in the amount of $11,000,000; that a hypothetical Base Rent Period
contains exactly ninety (90) days; that on the first day of such Base Rent
Period, after considering total Construction Advances and Carrying Costs of
$4,400,000 and deducting a total of $1,000,000 of Qualified Payments received by
Landlord, the resulting Stipulated Loss Value is $14,400,000; and that the
Effective Rate computed with respect to the applicable Base Rent Period is 4%.
Under such assumptions, the Base Rent for the hypothetical Base Rent Period will
equal:
$14,400,000 x 4% x 90/360, or $144,000.
(c) Upfront Fee. Contemporaneously with the execution and
delivery of this Lease by Landlord, Tenant is paying Landlord an upfront fee
(the "UPFRONT FEE"), which represents Additional Rent for the first Construction
Period, as agreed pursuant to a Letter Agreement dated June 5, 1995.
(d) Administrative Agency Fees. Upon execution and delivery
of this Lease by Landlord, and again on each anniversary of the date hereof
until the Base Rent Commencement Date, Tenant shall pay Landlord an
administrative fee (the "ADMINISTRATIVE FEE") equal to $4,500. Each
Administrative Fee shall represent Additional Rent Construction Period during
which it is paid. In the event that the Construction Period ends after the first
anniversary of the date hereof and Landlord has received payment of the
Administrative Fee due on such anniversary date, Landlord shall refund to Lessee
the pro rata portion of such Administrative Fee allocable to the period from the
end of the Construction Period until the second anniversary of the date hereof.
(e) Commitment Fees. For each Construction Period Tenant
shall pay Landlord a fee (herein called a "COMMITMENT FEE") equal to (1)
twenty-five basis points (25/100 of 1%), times (2) the difference at the end of
the first day of such Construction Period between (A) $15,400,000.00 and (B) the
sum (computed without deduction for any Qualified Payments) of the Initial
Funding Advances outstanding and all Construction Advances made by or on behalf
of Landlord and all Carrying Costs added to and made a part of the Construction
Allowance, times (3) the number of days in such Construction Period, divided by
(4) three hundred sixty (360). Tenant shall pay Commitment Fees in arrears on
January 1, April 1, July 1, and October 1 of each calendar year, beginning with
October 1, 1995 and continuing regularly thereafter to and including the first
of such dates to fall on or after the Last Advance Date; provided that if any of
such dates does not fall on a Business Day, the payment of Commitment Fees
otherwise then due shall become due on the next following Business Day; and
provided, further, if any Commitment Fees shall have accrued and remain unpaid
on the Designated Payment Date, such accrued unpaid Commitment Fees shall be due
on the Designated Payment Date.
(f) Additional Rent. All amounts which Tenant is required to
pay to or on behalf of Landlord pursuant to this Lease, together with every
charge, premium, interest and cost set forth herein which may be added for
nonpayment or late payment thereof, shall constitute rent (all such amounts,
other than Base Rent, are herein called "ADDITIONAL RENT").
(g) Interest and Order of Application. All Rent shall bear
interest, if not paid when first due, at the Default Rate in effect from time to
time from the date due until paid; provided, that nothing herein contained will
be construed as permitting the charging or collection of interest at a rate
exceeding the maximum rate permitted under Applicable Laws. Landlord shall be
entitled to apply any amounts paid by or on behalf of Tenant hereunder against
any Rent then past due in the order the same became due or in such other order
as Landlord may elect.
(h) Net Lease. It is the intention of Landlord and Tenant
that the Base Rent and all other payments herein specified shall be absolutely
net to Landlord. Tenant shall pay all costs, expenses and obligations of every
kind relating to the Leased Property or this Lease which may arise or become
due, including, without limitation: (i) Impositions, including any taxes payable
by virtue of Landlord's receipt of amounts paid to or on behalf of Landlord in
accordance with this subparagraph 3.(h), but not including any Excluded Taxes;
(ii) any Capital Adequacy Charges; (iii) any amount for which Landlord is or
becomes liable with respect to the Permitted Encumbrances; and (iv) any costs
incurred by Landlord (including Attorneys' Fees) because of this Lease or the
transactions contemplated herein.
(i) No Demand or Setoff. The Base Rent and all Additional
Rent shall be paid without notice or demand and without abatement, counterclaim,
deduction, setoff or defense, except as expressly provided herein.
5. Insurance and Condemnation Proceeds.
(a) Subject to Landlord's rights under this Paragraph 4, and so long
as no Event of Default shall have occurred and be continuing, Tenant shall be
entitled to use all casualty insurance and condemnation proceeds payable with
respect to the Leased Property during the Term for the restoration and repair of
the Leased Property or any remaining portion thereof. Except as provided in the
last sentence of subparagraph 9.(r) and the last sentence of subparagraph 9.(s),
all insurance and condemnation proceeds received with respect to the Leased
Property (including proceeds payable under any insurance policy covering the
Leased Property which is maintained by Tenant) shall be paid to Landlord and
then applied as follows:
(i) First, such proceeds shall be used to reimburse Landlord
for any costs and expenses, including Attorneys' Fees, incurred in
connection with the collection of such proceeds.
(ii) Second, the remainder of such proceeds (the "REMAINING
PROCEEDS"), shall be held by Landlord as Escrowed Proceeds and applied
to reimburse Tenant for the actual cost of the repair, restoration or
replacement of the Leased Property. However, any Remaining Proceeds not
needed for such purpose shall be applied by Landlord as Qualified
Payments after Tenant notifies Landlord that they are not needed for
repairs, restoration or replacement.
Notwithstanding the foregoing, if an Event of Default shall have occurred and be
continuing, then Landlord shall be entitled to receive and collect insurance or
condemnation proceeds payable with respect to the Leased Property, and either,
at the discretion of Landlord, (A) hold such proceeds as Escrowed Proceeds until
paid to Tenant as reimbursement for the actual and reasonable cost of repairing,
restoring or replacing the Leased Property when Tenant has completed such
repair, restoration or replacement, or (B) retain such proceeds (net of the
deductions described in clause (i) above) as Qualified Payments.
(b) Any Remaining Proceeds held by Landlord as Escrowed Proceeds
shall be deposited by Landlord in an interest bearing account as provided in the
definition of Escrowed Proceeds and shall be paid to Tenant upon completion of
the applicable repair, restoration or replacement and upon compliance by Tenant
with such terms, conditions and requirements as may be reasonably imposed by
Landlord, but in no event shall Landlord
be required to pay any Escrowed Proceeds to Tenant in excess of the actual cost
to Tenant of the applicable repair, restoration or replacement, it being
understood that Landlord may retain any such excess as a Qualified Payment. In
any event, Tenant will not be entitled to any abatement or reduction of the Base
Rent or any other amount due hereunder except to the extent that such excess
Remaining Proceeds result in Qualified Payments which reduce Stipulated Loss
Value (and thus payments computed on the basis of Stipulated Loss Value) as
provided in the definitions set out above. Further, notwithstanding the
inadequacy of the Remaining Proceeds held by Landlord as Escrowed Proceeds, if
any, or anything herein to the contrary, Tenant must, after any taking of less
than all or substantially all of the Leased Property by condemnation and after
any damage to the Leased Property by fire or other casualty, restore or improve
the Leased Property or the remainder thereof to a value no less than fifty
percent (50%) of Stipulated Loss Value (computed after the application of any
Remaining Proceeds as a Qualified Payment) and to a safe and sightly condition.
Any taking of so much of the Leased Property as, in Landlord's reasonable
judgment, makes it impracticable to restore or improve the remainder thereof as
required by the preceding sentence shall be considered a taking of substantially
all the Leased Property for purposes of this Paragraph 4.
(c) In the event of any taking of all or substantially all of the
Leased Property, Landlord shall be entitled to apply all Remaining Proceeds as a
Qualified Payment, notwithstanding the foregoing. In addition, if Stipulated
Loss Value immediately prior to any taking of all or substantially all of the
Leased Property by condemnation exceeds the sum of the Remaining Proceeds
resulting from such condemnation, then Landlord shall be entitled to recover the
excess from Tenant upon demand as an additional Qualified Payment, whereupon
this Lease shall terminate.
(d) Nothing herein contained shall be construed to prevent Tenant
from obtaining and applying as it deems appropriate any separate award from any
condemning authority or from any insurer for a taking of or damage to Tenant's
personal property not included in the Leased Property or for moving expenses or
business interruption, provided, such award is not combined with and does not
reduce the award for any taking of the Leased Property, including Tenant's
interest therein. Further, notwithstanding anything to the contrary herein
contained, if Remaining Proceeds held by Landlord during the term of this Lease
shall exceed Stipulated Loss Value and any Rent payable by Tenant, then Tenant
may obtain the excess by terminating this Lease in accordance with Paragraph 2
and purchasing any remaining interest of Landlord in the Leased Property and the
Escrowed Proceeds, pursuant to the Purchase Agreement.
(e) Landlord and Tenant each waive any right of recovery against the
other, and the other's agents, officers or employees, for any damage to the
Leased Property or to the personal property situated from time to time in or on
the Leased Property resulting from fire or other casualty covered by a valid and
collectible insurance policy; provided, however, that the waiver set forth in
this subparagraph 4.(e) shall be effective insofar, but only insofar, as
compensation for such damage or loss is actually recovered by the waiving party
(net of costs of collection) under the policy notwithstanding the waivers set
out in this paragraph. Tenant shall cause the insurance policies required of
Tenant by this Lease to be properly endorsed, if necessary, to prevent any loss
of coverage because of the waivers set forth in this paragraph. If such
endorsements are not available, the waivers set forth in this paragraph shall be
ineffective to the extent that such waivers would cause required insurance with
respect to the Leased Property to be impaired.
6. No Lease Termination.
(a) Status of Lease. Except as expressly provided herein,
this Lease shall not terminate, nor shall Tenant have any right to terminate
this Lease, nor shall Tenant be entitled to any abatement of the Rent, nor shall
the obligations of Tenant under this Lease be excused, for any reason
whatsoever, including without limitation any of the following: (i) any damage to
or the destruction of all or any part of the Leased Property from whatever
cause, (ii) the taking of the Leased Property or any portion thereof by eminent
domain or
otherwise for any reason, (iii) the prohibition, limitation or restriction of
Tenant's use of all or any portion of the Leased Property or any interference
with such use by governmental action or otherwise, (iv) any eviction of Tenant
or of anyone claiming through or under Tenant by paramount title or otherwise
(provided, if Tenant is wrongfully evicted by Landlord or by any third party
lawfully claiming through or under Landlord, other than Tenant or a third party
claiming through or under Tenant, then Tenant will have the remedies described
in Paragraph 15 below), (v) any default on the part of Landlord under this Lease
or under any other agreement to which Landlord and Tenant are parties, (vi) the
inadequacy in any way whatsoever of the design or construction of any
improvements included in the Leased Property, it being understood that Landlord
has not made and will not make any representation express or implied as to the
adequacy thereof, or (vii) any other cause whether similar or dissimilar to the
foregoing, any existing or future law to the contrary notwithstanding. It is the
intention of the parties hereto that the obligations of Tenant hereunder shall
be separate and independent of the covenants and agreements of Landlord, that
the Base Rent and all other sums payable by Tenant hereunder shall continue to
be payable in all events and that the obligations of Tenant hereunder shall
continue unaffected, unless the requirement to pay or perform the same shall
have been terminated or limited pursuant to an express provision of this Lease.
However, nothing in this Paragraph shall be construed as a waiver by Tenant of
any right Tenant may have at law or in equity to (i) recover monetary damages
for any default under this Lease by Landlord that Landlord fails to cure within
the period provided in Paragraph 15, (ii) injunctive relief in case of the
violation, or attempted or threatened violation, by Landlord of any of the
express covenants, agreements, conditions or provisions of this Lease, or (iii)
a decree compelling performance of any of the express covenants, agreements,
conditions or provisions of this Lease.
(b) Waiver By Tenant. Without limiting the foregoing, Tenant
waives to the extent permitted by Applicable Laws, except as otherwise expressly
provided herein, all rights to which Tenant may now or hereafter be entitled by
law (including any such rights arising because of any implied "warranty of
suitability" or other warranty under Applicable Laws) (i) to quit, terminate or
surrender this Lease or the Leased Property or any part thereof or (ii) to any
abatement, suspension, deferment or reduction of the Base Rent or any other sums
payable under this Lease.
7. Advances for the Purchase of the Land-51 Rio Robles and for
Construction.
(a) Purchase Price of the Land-51 Rio Robles. This Lease
will become effective as to the Land-51 Rio Robles any Improvements
thereon and any Personal Property on or pertaining thereto only when and
to the extent the same are acquired by Landlord, and any delay in such
acquisition shall not extend the expiration of the Term. Landlord shall
have no obligation to pay for or accept title to the Land- 51 Rio Robles
if the title thereto or condition thereof is not then acceptable to
Landlord in Landlord's sole discretion. Further, any obligation of
Landlord to acquire the Land-51 Rio Robles and any Improvements thereon
and any Personal Property thereof or relating thereto shall be subject
to the following conditions:
(i) Purchase Price and Other Contract Terms. The
purchase price for the Land-51 Rio Robles and related Leased
Property shall not exceed $4,825,000, and the Existing Contract
as it pertains to the Land-51 Rio Robles shall be in form and
substance satisfactory to Landlord in its sole discretion.
(ii) Representations, Ratification of this Lease, and
Confirmation of the Initial Funding Advances. All
representations of Tenant in this Lease relating to the Leased
Property are and will continue to be true after the acquisition,
and Tenant shall provide a certificate to Landlord
contemporaneously with the acquisition confirming such
representations, ratifying this Lease, the Purchase Agreement
and the Environmental Indemnity Agreement, and confirming the
amount of the Initial Funding Advance-51 Rio Robles. Further,
this Lease and other agreements referenced herein between
Landlord and Tenant shall be, upon request therefor by Landlord,
modified after
the date hereof by written amendments to add a revised
description of the Land-51 Rio Robles and to make any other
modifications deemed necessary to further subject such Land to
this Lease and the other agreements referenced herein.
(iii) Title Insurance. Landlord shall receive title
insurance in connection with its acquisition satisfactory to
Landlord in its sole discretion.
(iv) No Event of Default or Change of Control Event.
No Event of Default shall have occurred and be continuing under
this Lease and no Change of Control Event shall have occurred.
(v) No Sale of Landlord's Interest. No sale of
Landlord's interest in the Leased Property shall have occurred
pursuant to the Purchase Agreement.
(b) Advances; Outstanding Construction Allowance.
(i) Subject to the conditions set forth below, Landlord
shall make advances (herein called "CONSTRUCTION ADVANCES") on Advance
Dates from time to time as requested by Tenant to reimburse Tenant for
the actual cost of making the Initial Improvements to the Leased
Property and for any property taxes or assessments payable prior to the
Last Advance Date with respect to the Leased Property. In no event will
the total of all Construction Advances which may be required of
Landlord, when added to Carrying Costs accrued or projected by Landlord
to accrue prior to the Base Rent Commencement Date as described below,
exceed the Maximum Construction Allowance. As used herein, references to
the "OUTSTANDING CONSTRUCTION ALLOWANCE" shall mean the difference on
the date in question (but not less than zero) of (A) the total
Construction Advances made by Landlord and all Carrying Costs added
thereto under subparagraph 6.(b)(ii) on or prior to the date in
question, less (B) any Qualified Payments received on or prior to the
date in question. (Landlord will not be under any obligation to
readvance any portion of the Construction Allowance repaid by Qualified
Payments.) Notwithstanding the foregoing, if for any reason Stipulated
Loss Value (and thus the Outstanding Construction Allowance included as
a component thereof) must be determined under this Lease as of any date
between Advance Dates, the Outstanding Construction Allowance determined
on such date shall equal the Outstanding Construction Allowance on the
immediately preceding Advance Date computed in accordance with the
preceding sentence, plus Carrying Costs accruing on and after such
preceding Advance Date to but not including the date in question.
(ii) Charges accruing at the Effective Rate (herein
collectively called "CARRYING COSTS") for each Construction Period prior
to or ending on the Base Rent Commencement Date will be added to (and
thereafter be included in) the Outstanding Construction Allowance on the
last day of such Construction Period (i.e., generally on the Advance
Date upon which such Construction Period ends). Carrying Costs shall be
calculated as follows:
a) The total Carrying Costs for the first short
Construction Period ending September 1, 1995 shall be equal to
the sum of the Carrying Costs computed for each day included in
such period, and the Carrying Costs for each such day shall
equal (A) the Initial Funding Advances outstanding on such day,
times (B) the per annum Effective Rate for such day, divided by
(C) 360 equal.
b) The amount of Carrying Costs for each subsequent
Construction Period shall be equal to (A) Stipulated Loss Value
(including Carrying Costs added with respect to every previous
Construction Period, if any) as of the first day of such
Construction Period, times (B) the Effective
Rate with respect to such Construction Period, times (C) the
number of days in such Construction Period, divided by (D) 360.
(c) Initial Improvements.
(i) Responsibility for Construction. Tenant shall construct
all Initial Improvements in a good and workmanlike manner, in accordance
with (1) plans and specifications approved by Landlord in writing, (2)
Applicable Laws, and (3) the other provisions of this Lease. Further,
except for building foundations, driveways, parking lots, sidewalks and
other improvements which would not suffer damage by being submerged
under flood waters, all existing Improvements are and all Initial
Improvements shall be constructed above the elevation that the U.S. Army
Corp of Engineers or any other governmental authority estimates as the
highest elevation that 100 year flood waters could be expected to reach.
Tenant shall have sole responsibility for contracting for and
administering the construction of Initial Improvements, it being
understood that Landlord's obligation with respect to the Initial
Improvements shall be limited to the making of advances under and
subject to the conditions set forth in Paragraph 6.(d). No contractor or
other third party shall be entitled to enforce Landlord's obligations to
make advances as a third party beneficiary. Notwithstanding delays
beyond Tenant's control, and even if the Construction Allowance is not
sufficient to pay for completion of Initial Improvements, Tenant
warrants that it shall cause all Initial Improvements with respect to
which it receives any Construction Advances to be completed on or prior
to the Completion Deadline.
(ii) Scope Changes. Before making any Scope Change to the
Initial Improvements, Tenant shall provide to Landlord a reasonably
detailed written description of the Scope Change and a revised
construction budget, all of which must be approved in writing by
Landlord (or by any construction representative appointed by Landlord
from time to time) before the Scope Change is implemented.
(iii) Value Added. The Initial Improvements, upon completion
and taken as a whole, must enhance the value of the Leased Property by
an amount commensurate with the total Construction Allowance used by
Tenant; however, this requirement will not preclude Tenant from
obtaining Construction Advances for soft costs (such as architectural
fees), demolition costs or other costs that do not, individually, add
value to the Leased Property but that are incurred in connection with
the construction of Initial Improvements which will in the aggregate
satisfy this requirement. For purposes hereof, the Initial Improvements
will be deemed to have added value "commensurate" with the Construction
Allowance used by Tenant if, when the Initial Improvements are
substantially complete, the Leased Property has a fair market value with
the Initial Improvements that exceeds the fair market value which the
Leased Property would have without the Initial Improvements by an amount
equal to no less than fifty percent (50%) of the then Outstanding
Construction Allowance.
(iv) Estoppel Letters Required. If requested by Landlord
prior to the substantial completion of the Initial Improvements, Tenant
shall cause the contractor under each significant general construction
contract for the Initial Improvements to execute and deliver to Landlord
an estoppel letter in the form of Exhibit D attached hereto. Similarly,
if requested by Landlord prior to the substantial completion of the
Initial Improvements, Tenant shall also cause the architect and engineer
under any material architectural or engineering contract for the Initial
Improvements to execute and deliver to Landlord an estoppel letter in
the form of Exhibit E attached hereto; provided, that no such estoppel
letter shall be required from any architect or engineer who has assigned
his plans and specifications for the Initial Improvements to Tenant
without restricting Tenant's right to further assign or allow another to
use the same. Tenant hereby grants to Landlord (and Landlord's
successors and assigns through any Permitted Transfer) a license to copy
and use any such plans and specifications as Landlord shall deem
appropriate.
(v) Advances Not a Waiver. No funding of Construction
Advances and no failure of Landlord to object to Initial Improvements
proposed or constructed by Tenant shall constitute a waiver by Landlord
of the requirements contained in this subparagraph 6.(c).
(d) Conditions to Construction Advances. Landlord's
obligation to make Construction Advances from time to time under Paragraph 6.(b)
shall be subject to the following terms and conditions, all of which are
intended for the sole benefit of Landlord:
(i) Prior Notice. Tenant must make a request in
substantially the form attached to this Lease as Exhibit F for any
Construction Advance at least ten (10) Business Days prior to the
Advance Date upon which the advance is to be paid, except in the case of
any Construction Advance requested on the first Advance Date, for which
only five (5) Business Days shall be required. Landlord shall consider
in good faith any changes to the Construction Advance request forms
attached hereto that Tenant may reasonably request, provided the
requested changes do not impair Landlord's rights or create or increase
any liability Landlord may have in connection with the Initial
Improvements.
(ii) Amount of the Advances. No Construction Advance shall
exceed the lesser of:
a) the Maximum Construction Allowance, less (1) all
prior Construction Advances and all Carrying Costs accruing
through the date of such advance, and (2) the Carrying Costs
then projected by Landlord to be added to the Construction
Allowance on and after the date of the advance; or
b) (1) the actual costs and expenses previously incurred
and paid by Tenant for the Initial Improvements, including "soft
costs," and for property taxes or assessments assessed against
the Leased Property after the date hereof and prior to the Last
Advance Date, less (2) the sum of all previous Construction
Advances made under Paragraph 6.(b) to Tenant as reimbursement
for such costs and expenses.
Further, no Construction Advance shall be required that would cause the
cost of completing all Initial Improvements then contemplated as
estimated by Landlord to exceed the difference computed by subtracting
(1) the Carrying Costs then projected by Landlord to be added to the
Outstanding Construction Allowance, from (2) the Construction Allowance
remaining to be advanced.
Further, Tenant shall not request any Construction Advance (other than
the final Construction Advance) for an amount less than $250,000.
(iii) Insurance. Tenant shall have obtained and provided
certificates (or, in the case of clause a) below, title policies or
binders) reasonably satisfactory to Landlord evidencing insurance
covering the Leased Property as follows (in addition to the liability
insurance required under subparagraph 9.(z) below):
a) Title Insurance. An owner's title insurance policy
(or binder committing the applicable title insurer to issue an
owner's title insurance policy, without the payment of further
premiums) in an amount, form and substance and written by Santa
Clara Land Title Company or one or more other title insurance
companies reasonably satisfactory to Landlord and insuring
Landlord's interest in the Leased Property, including Landlord's
interest in any new Improvements constructed by Tenant, in the
amount no less than Stipulated Loss Value plus any remaining
portion of the Construction Allowance to be advanced under this
Lease; and
b) Builder's Risk Insurance. Builder's Completed Value
Risk and such other hazard insurance as Landlord may reasonably
require against all risks of physical loss (including collapse
and transit coverage, but not including earthquake or flood
coverage) with deductibles not to exceed $500,000, such
insurance to be in amounts sufficient to cover the total value
of any Improvements under construction and to be maintained in
full force and effect at all times until completion of the
Initial Improvements.
(iv) Progress of Construction. Construction of the Initial
Improvements shall be progressing in a good and workmanlike manner and
in accordance with the requirements of this Lease without any continuing
significant interruption, other than interruptions beyond the reasonable
control of Tenant that are not likely to cause the cost of such
construction (and Carrying Costs and construction period ad property
taxes and assessments) to exceed the Maximum Construction Allowance.
Also, Tenant shall have corrected or caused the correction promptly of
any significant defect in such construction.
(v) Evidence of Costs to be Reimbursed. To the extent
contemplated by the Construction Advance request forms attached as
Exhibit F and described in subparagraph 6.(d)(i), or otherwise required
by Landlord at the time a Construction Advance is to be made, Tenant
shall have submitted invoices, requests for payment from contractors,
certifications from Tenant's architect or construction manager, lien
releases and other evidence satisfactory to Landlord that (A) all costs
for which Tenant requests reimbursement constitute actual costs incurred
by Tenant for the construction of the Initial Improvements or constitute
property taxes or assessments assessed against the Leased Property and
paid by Tenant prior to the Last Advance Date with respect to the Leased
Property and (B) general contractors and all parties that have filed a
statutory Preliminary Notice which would give them the right to assert a
mechanic's or materialman's lien against the Leased Property
(collectively, "POTENTIAL LIEN CLAIMANTS") have been paid all sums for
which prior Construction Advances have been advanced. Without limiting
the foregoing, Landlord may decline to advance any amount that would
result in an excess of $2,000,000 or more of (1) the total cost of work
with respect to which Potential Lien Claimants could have asserted a
lien against the Leased Property and for which Construction Advances
have been advanced by Landlord, over (2) the cost of such work for which
Tenant has provided to Landlord unconditional statutory lien releases
from all Potential Lien Claimants in form and substance reasonably
satisfactory to Landlord.
(vi) No Event of Default or Change of Control Event. No Event
of Default shall have occurred and be continuing under this Lease and no
Change of Control Event shall have occurred.
(vii) No Sale of Landlord's Interest. No sale of Landlord's
interest in the Leased Property shall have occurred pursuant to the
Purchase Agreement.
(viii) Construction Advance Certificate. Landlord shall have
received, together with the notice requesting the Construction Advance
described in clause (i) above, a current Construction Advance
Certificate executed by a Responsible Financial Officer of Tenant in the
form attached to Exhibit F.
(ix) Payments by Participants. No Participant or its
successor under its Participation Agreement with Landlord shall have
failed to advance to Landlord its Participant's percentage of the
purchase price for the Land-51 Rio Robles and related Leased Property or
for the Construction Advance being requested. However, any such failure
of a Participant to fund its Participant's percentage of any
Construction Advance being requested shall excuse Landlord's obligation
to provide such Construction Advance only to the extent of the funds
that the applicable Participant or Participants should have advanced
(but did not advance) to Landlord, provided that any such failure of a
Participant to fund its Participant's percentage of such purchase price
shall excuse Landlord's obligation to lease the Land-51 Rio Robles and
related Leased Property to Tenant. In the event of any such failure:
a) Landlord will immediately notify Tenant if any
Participant refuses or fails to advance its Participant's
percentage of such purchase price or any Construction Advance,
but Landlord will not in any event be liable to Tenant for
Landlord's failure to do so.
b) Landlord will, to the extent possible, postpone
reductions of Construction Advances because of the failure by
any one or more Defaulting Participants to make required
advances under their Participation Agreements with Landlord (a
"Participant Default") by adjusting (and readjusting from time
to time, as required) the funding "Percentages" of other
Participants, and by requesting the other Participants to make
advances to Landlord on the basis of such adjusted Percentages,
in each case as provided in the Participation Agreements between
the Participants and Landlord; however, so long as a Participant
Default continues, no Construction Advance shall be required
that would cause the Outstanding Construction Allowance to
exceed (a) the Maximum Construction Allowance available under
this Lease, less (b) all amounts that should have been, but
because of a continuing Participant Default have not been,
advanced by any one or more of the Participants to Landlord
under their Participation Agreements with Landlord with respect
to Construction Advances.
(e) Completion Notice. Tenant shall provide a notice to Landlord
(the "COMPLETION NOTICE") promptly after construction of the Initial
Improvements is substantially complete and more than fifty percent (50%) of the
Initial Improvements are being occupied by Tenant.
8. Purchase Agreement, Pledge Agreement and Environmental
Indemnity Agreement. Tenant acknowledges and agrees that nothing contained in
this Lease shall limit, modify or otherwise affect any of Tenant's obligations
under the Purchase Agreement, Pledge Agreement or Environmental Indemnity, which
obligations are intended to be separate, independent and in addition to, and not
in lieu of, the obligations established by this Lease. In the event of any
inconsistency between the terms and provisions of the Purchase Agreement, Pledge
Agreement or Environmental Indemnity and the terms and provisions of this Lease,
the terms and provisions of the Purchase Agreement, Pledge Agreement or
Environmental Indemnity (as the case may be) shall control.
9. Use and Condition of Leased Property.
(a) Use. Subject to the Permitted Encumbrances and the terms
hereof, Tenant may use and occupy the Leased Property so long as no Event of
Default occurs hereunder, but only for the following purposes and other lawful
purposes incidental thereto:
(i) administrative and office space; and
(ii) distribution and warehouse storage of
semiconductor-related and other electronic products; and
(iii) assembly of semiconductor-related and other electronic
products using components manufactured elsewhere; and
(iv) cafeteria, library, fitness center and other support
function uses that Tenant may provide to its employees.
Although the term "electronic products" in this subparagraph may include
products designed to detect, monitor, neutralize, handle or process Hazardous
Substances, the use of the Leased Property by Tenant shall not include
bringing Hazardous Substances onto the Leased Property for the purpose of
researching, testing or demonstrating any such products.
(b) Condition. Tenant accepts the Leased Property (and will
accept the same upon any purchase of the Landlord's interest therein) in its
present state, AS IS, and without any representation or warranty, express or
implied, as to the condition of such property or as to the use which may be made
thereof. Tenant also accepts the Leased Property without any representation or
warranty, express or implied, by Landlord regarding the title thereto or the
rights of any parties in possession of any part thereof, except as set forth in
subparagraph 10.(a). Landlord shall not be responsible for any latent or other
defect or change of condition in the Land, Improvements, fixtures and personal
property forming a part of the Leased Property, and the Rent hereunder shall in
no case be withheld or diminished because of any latent or other defect in such
property, any change in the condition thereof or the existence with respect
thereto of any violations of Applicable Laws. Nor shall Landlord be required to
furnish to Tenant any facilities or service of any kind, such as, but not
limited to, water, steam, heat, gas, hot water, electricity, light or power.
(c) Consideration of and Scope of Waiver. The provisions of
subparagraph 8.(b) above have been negotiated by the Landlord and Tenant after
due consideration for the Rent payable hereunder and are intended to be a
complete exclusion and negation of any representations or warranties of the
Landlord, express or implied, with respect to the Leased Property that may arise
pursuant to any law now or hereafter in effect, or otherwise. However, such
exclusion of representations and warranties by Landlord is not intended to
impair any representations or warranties made by other parties, the benefit of
which is to pass to Tenant during the Term because of the definition of Personal
Property and Leased Property above.
10. Other Representations, Warranties and Covenants of Tenant.
Tenant represents, warrants and covenants as follows:
(a) Financial Matters. Tenant is solvent and has no
outstanding liens, suits, garnishments or court actions which could render
Tenant insolvent. There has not been filed by or, to Tenant's knowledge, against
Tenant a petition in bankruptcy or a petition or answer seeking an assignment
for the benefit of creditors, the appointment of a receiver, trustee, custodian
or liquidator with respect to Tenant or any significant portion of Tenant's
property, reorganization, arrangement, rearrangement, composition, extension,
liquidation or dissolution or similar relief under the federal Bankruptcy Code
or any state law. The financial statements and all financial data heretofore
delivered to Landlord relating to Tenant have been prepared in accordance with
GAAP in all material respects. No material adverse change has occurred in the
financial position of Tenant as reflected in Tenant's financial statements
covering the fiscal period ended March 31, 1995.
(b) Existing Contract. Tenant shall satisfy all surviving
obligations of the "Buyer" (as the term "Buyer" is used in the Existing
Contract) under the Existing Contract and under all other documents, the
execution of which is required by or in connection with the Existing Contract.
Tenant agrees to indemnify, defend and hold Landlord harmless from and against
any and all Losses of any and every kind or character, known or unknown, fixed
or contingent, imposed on or asserted against or incurred by Landlord at any
time and from time to time by reason of, in connection with or arising out of
any obligations imposed by the Existing Contract. THE INDEMNITY SET OUT IN THIS
SUBPARAGRAPH SHALL APPLY EVEN IF THE SUBJECT OF THE INDEMNIFICATION IS CAUSED BY
OR ARISES OUT OF THE ORDINARY NEGLIGENCE (AS DEFINED ABOVE) OF LANDLORD;
provided, such indemnity shall not apply to Losses proximately caused by (and
attributed by any applicable principles of comparative fault to) the Active
Negligence, gross negligence or willful misconduct of Landlord. Because Tenant
hereby assumes and agrees to satisfy all surviving obligations of the Buyer
under the Existing Contract, no failure by Landlord to take any action required
by the Existing Contract shall, for the purposes of this indemnity, be deemed to
be caused by the willful misconduct of Landlord. The foregoing indemnity is in
addition to the other indemnities set out herein
and shall not terminate upon the closing of any sale of Landlord's interest in
the Leased Property pursuant to the provisions of the Purchase Agreement or the
termination of this Lease.
(c) No Default or Violation. The execution, delivery and
performance by Tenant of this Lease, the Purchase Agreement, the Pledge
Agreement and the Environmental Indemnity do not and will not constitute a
breach or default under any other material agreement or contract to which Tenant
is a party or by which Tenant is bound or which affects the Leased Property or
Tenant's use, occupancy or operation of the Leased Property or any part thereof
and do not, to the knowledge of Tenant, violate or contravene any law, order,
decree, rule or regulation to which Tenant is subject, and such execution,
delivery and performance by Tenant will not result in the creation or imposition
of (or the obligation to create or impose) any lien, charge or encumbrance on,
or security interest in, Tenant's property pursuant to the provisions of any of
the foregoing.
(d) Compliance with Covenants and Laws. The intended use of
the Leased Property by Tenant complies, or will comply after Tenant obtains
readily available permits, in all material respects with all applicable
restrictive covenants, zoning ordinances and building codes, flood disaster
laws, applicable health, safety and environmental laws and regulations, the
Americans with Disabilities Act and other laws pertaining to disabled persons,
and all other applicable laws, statutes, ordinances, rules, permits,
regulations, orders, determinations and court decisions (all of the foregoing
are herein sometimes collectively called "APPLICABLE LAWS"). Tenant has obtained
or will promptly obtain all utility, building, health and operating permits as
may be required for Tenant's use of the Leased Property by any governmental
authority or municipality having jurisdiction over the Leased Property.
(e) Environmental Representations. To Tenant's knowledge and
except as otherwise disclosed in the Environmental Report, as of the date
hereof: (i) no Hazardous Substances Activity has occurred prior to the date of
this Lease; (iii) neither Tenant nor any prior owner or operator of the Leased
Property or any surrounding property has reported or been required to report any
release of any Hazardous Substances on or from the Leased Property or the
surrounding property pursuant to any Environmental Law; (iv) neither Tenant nor
any prior owner or operator of the Leased Property or any surrounding property
has received any warning, citation, notice of violation or other communication
regarding a suspected or known release or discharge of Hazardous Substances on
or from the Leased Property or regarding a suspected or known violation of
Environmental Laws concerning the Leased Property from any federal, state or
local agency; and (v) none of the following are located on the Leased Property:
asbestos; urea formaldehyde foam insulation; transformers or other equipment
which contain dielectric fluid containing levels of polychlorinated biphenyls in
excess of fifty (50) parts per million; any other Hazardous Substances other
than Permitted Hazardous Substances; or any underground storage tank or tanks.
Further, Tenant represents that to its knowledge the Environmental Report is not
misleading or inaccurate in any material respect.
(f) No Suits. There are no judicial or administrative
actions, suits, proceedings or investigations pending or, to Tenant's knowledge,
threatened that will affect Tenant's intended use of the Leased Property or the
validity, enforceability or priority of this Lease, or Tenant's use, occupancy
and operation of the Leased Property or any part thereof, and Tenant is not in
default with respect to any order, writ, injunction, decree or demand of any
court or other governmental or regulatory authority that could materially and
adversely affect the business or assets of Tenant and its Subsidiaries taken as
a whole or Tenant's use, occupancy or operation of the Leased Property. No
condemnation or other like proceedings are pending or, to Tenant's knowledge,
threatened against the Leased Property.
(g) Condition of Property. The Land as described in Exhibit
A is the same as the land shown on the plat included as part of the ALTA/ACSM
Land Title Survey prepared by Kier & Wright, Civil Engineers & Surveyors, Inc.,
which was delivered to Landlord at the request of Tenant. When the Initial
Improvements are completed in accordance with the requirements of this Lease,
adequate provision will have been made for the
Leased Property to be served by electric, gas, storm and sanitary sewers,
sanitary water supply, telephone and other utilities required for the use
thereof. All streets, alleys and easements necessary to serve the Leased
Property have been completed and are serviceable or will be so when the Initial
Improvements are complete. The Leased Property will be, when the Initial
Improvements are complete, in a condition satisfactory for its use and
occupancy. Tenant is not aware of any latent or patent material defects or
deficiencies in the Leased Property that, either individually or in the
aggregate, could materially and adversely affect Tenant's use or occupancy or
could reasonably be anticipated to endanger life or limb.
(h) Organization. Tenant is duly incorporated and legally
existing under the laws of the State of Delaware. Tenant has all requisite power
and has procured or will procure on a timely basis all governmental certificates
of authority, licenses, permits, qualifications and other documentation required
to lease and operate the Leased Property. Tenant has the corporate power and
adequate authority, rights and franchises to own Tenant's property and to carry
on Tenant's business as now conducted and is duly qualified and in good standing
in each state in which the character of Tenant's business makes such
qualification necessary (including, without limitation, the State of California)
or, if it is not so qualified in a state other than California, such failure
does not have a material adverse effect on the properties, assets, operations or
businesses of Tenant and its Subsidiaries, taken as a whole.
(i) Enforceability. The execution, delivery and performance
of this Lease, the Purchase Agreement, the Pledge Agreement and the
Environmental Indemnity are duly authorized and do not require the consent or
approval of any governmental body or other regulatory authority that has not
heretofore been obtained and are not in contravention of or conflict with any
Applicable Laws or any term or provision of Tenant's articles of incorporation
or bylaws. This Lease, the Purchase Agreement, the Pledge Agreement and the
Environmental Indemnity are valid, binding and legally enforceable obligations
of Tenant in accordance with their terms, except as such enforcement is affected
by bankruptcy, insolvency and similar laws affecting the rights of creditors,
generally, and equitable principles of general application.
(j) Not a Foreign Person. Tenant is not a "foreign person"
within the meaning Sections 1445 and 7701 of the Code (i.e., Tenant is not a
non-resident alien, foreign corporation, foreign partnership, foreign trust or
foreign estate as those terms are defined in the Code and regulations
promulgated thereunder).
(k) Omissions. To Tenant's knowledge, none of Tenant's
representations or warranties contained in this Lease or any document,
certificate or written statement furnished to Landlord by or on behalf of Tenant
contains any untrue statement of a material fact or omits a material fact
necessary in order to make the statements contained herein or therein (when
taken in their entireties) not misleading.
(l) Existence. Tenant shall continuously maintain its
existence and its qualification to do business in the State of California.
(m) Tenant Taxes. Tenant shall comply with all applicable
tax laws and pay before the same become delinquent all taxes imposed upon it or
upon its property where the failure to so comply or so pay would have a material
adverse effect on the financial condition or operations of Tenant; except that
Tenant may in good faith by appropriate proceedings contest the validity,
applicability or amount of any such taxes and pending such contest Tenant shall
not be deemed in default under this subparagraph if (1) Tenant diligently
prosecutes such contest to completion in an appropriate manner, and (2) Tenant
promptly causes to be paid any tax adjudged by a court of competent jurisdiction
to be due, with all costs, penalties, and interest thereon, promptly after such
judgment becomes final; provided, however, in any event such contest shall be
concluded and the tax, penalties, interest and costs shall be paid prior to the
date any writ or order is issued under which any of Tenant's property that is
material to the business of Tenant and its Subsidiaries taken as a whole may be
seized or sold because of the nonpayment thereof.
(n) Operation of Property. Tenant shall operate the Leased
Property in a good and workmanlike manner and in compliance with all Applicable
Laws and will pay all fees or charges of any kind in connection therewith.
Tenant shall not use or occupy, or allow the use or occupancy of, the Leased
Property in any manner which violates any Applicable Law or which constitutes a
public or private nuisance or which makes void, voidable or cancelable any
insurance then in force with respect thereto. To the extent that any of the
following would, individually or in the aggregate, materially and adversely
affect the value of the Leased Property or Tenant's use, occupancy or operations
on the Leased Property, Tenant shall not: (i) initiate or permit any zoning
reclassification of the Leased Property; (ii) seek any variance under existing
zoning ordinances applicable to the Leased Property; (iii) use or permit the use
of the Leased Property in a manner that would result in such use becoming a
nonconforming use under applicable zoning ordinances or similar laws, rules or
regulations; (iv) execute or file any subdivision plat affecting the Leased
Property; or (v) consent to the annexation of the Leased Property to any
municipality. If a change in the zoning or other Applicable Laws affecting the
permitted use or development of the Leased Property shall occur that Landlord
determines will materially reduce the then-current market value of the Leased
Property, and if after such reduction the Stipulated Loss Value shall
substantially exceed the then-current market value of the Leased Property in the
reasonable judgment of Landlord, then Tenant shall pay Landlord an amount equal
to such excess for application as a Qualified Payment. Tenant shall make any
payment required by the preceding sentence within one hundred eighty (180) days
after it is requested by Landlord and in any event shall make any such payment
before the end of the Term. Tenant shall not impose any restrictive covenants or
encumbrances upon the Leased Property without the prior written consent of the
Landlord; provided, that such consent shall not be unreasonably withheld for any
encumbrance or restriction that is made expressly subject to this Lease, as
modified from time to time, and subordinate to Landlord's interest in the Leased
Property by an agreement in form satisfactory to Landlord.
Tenant shall not cause or permit any drilling or exploration for, or extraction,
removal or production of, minerals from the surface or subsurface of the Leased
Property. Tenant shall not do any act whereby the market value of the Leased
Property may be materially lessened. Tenant shall allow Landlord or its
authorized representative to enter the Leased Property at any reasonable time to
inspect the Leased Property and, after reasonable notice, to inspect Tenant's
books and records pertaining thereto, and Tenant shall assist Landlord or
Landlord's representative in whatever way reasonably necessary to make such
inspections. If Tenant receives a written notice or claim from any federal,
state or other governmental entity that the Leased Property is not in compliance
in any material respect with any Applicable Law, or that any action may be taken
against the owner or lessee of the Leased Property because the Leased Property
does not comply with Applicable Law, Tenant shall promptly furnish a copy of
such notice or claim to Landlord. Notwithstanding the foregoing, Tenant may in
good faith, by appropriate proceedings, contest the validity and applicability
of any Applicable Law with respect to the Leased Property, and pending such
contest Tenant shall not be deemed in default hereunder because of a violation
of such Applicable Law, if Tenant diligently prosecutes such contest to
completion in a manner reasonably satisfactory to Landlord, and if Tenant
promptly causes the Leased Property to comply with any such Applicable Law upon
a final determination by a court of competent jurisdiction that the same is
valid and applicable to the Leased Property; provided, that in any event such
contest shall be concluded and the violation of such Applicable Law must be
corrected and any claims asserted against Landlord or the Leased Property
because of such violation must be paid by Tenant, all prior to the date that (i)
any criminal charges may be brought against Landlord or any of its directors,
officers or employees because of such violation or (ii) any action may be taken
by any governmental authority against Landlord or any property owned or leased
by Landlord (including the Leased Property) because of such violation.
(o) Debts for Construction. Tenant shall cause all debts and
liabilities incurred in the construction, maintenance, operation and development
of the Leased Property, including without limitation all debts and liabilities
for labor, material and equipment and all debts and charges for utilities
servicing the Leased Property, to be promptly paid. Notwithstanding the
foregoing, Tenant may in good faith by appropriate proceedings contest the
validity, applicability or amount of any asserted mechanic's or materialmen's
lien and
pending such contest Tenant shall not be deemed in default under this
subparagraph (or subparagraphs 9.(t) or 9.(u)) because of the contested lien if
(1) within sixty (60) days after being asked to do so by Landlord, Tenant bonds
over to Landlord's satisfaction any contested liens alleged to secure an amount
in excess of $500,000 (individually or in the aggregate) (2) Tenant diligently
prosecutes such contest to completion in a manner reasonably satisfactory to
Landlord, and (3) Tenant promptly causes to be paid any amount adjudged by a
court of competent jurisdiction to be due, with all costs and interest thereon,
promptly after such judgment becomes final; provided, however, that in any event
each such contest shall be concluded and the lien, interest and costs shall be
paid prior to the date (i) any criminal action may be instituted against
Landlord or its directors, officers or employees because of the nonpayment
thereof or (ii) any writ or order is issued under which any property owned or
leased by Landlord (including the Leased Property) may be seized or sold or any
other action may be taken against Landlord or any property owned or leased by
Landlord because of the nonpayment thereof.
(p) Impositions. Tenant shall reimburse Landlord for (or, if
requested by Landlord, will pay or cause to be paid prior to delinquency) all
sales, excise, ad valorem, gross receipts, business, transfer, stamp, occupancy,
rental and other taxes, levies, fees, charges, surcharges, assessments or
penalties which arise out of or are attributable to this Lease or which are
imposed upon Landlord or the Leased Property because of the ownership, leasing,
occupancy, sale or operation of the Leased Property, or any part thereof, or
relating to or required to be paid by the terms of any of the Permitted
Encumbrances (collectively, herein called the "IMPOSITIONS"), excluding only
Excluded Taxes. If Landlord requires Tenant to pay any Impositions directly to
the applicable taxing authority or other party entitled to collect the same,
Tenant shall furnish Landlord with receipts showing payment of such Impositions
and other amounts prior to delinquency; except that Tenant may in good faith by
appropriate proceedings contest the validity, applicability or amount of any
asserted Imposition, and pending such contest Tenant shall not be deemed in
default of this subparagraph (or subparagraphs 9.(t) or 9.(u)) because of the
contested Imposition if (1) within sixty (60) days after being asked to do so by
Landlord, Tenant bonds over to the satisfaction of Landlord any lien asserted
against the Leased Property and alleged to secure an amount in excess of
$500,000 because of the contested Imposition, (2) Tenant diligently prosecutes
such contest to completion in a manner reasonably satisfactory to Landlord, and
(3) Tenant promptly causes to be paid any amount adjudged by a court of
competent jurisdiction to be due, with all costs, penalties and interest
thereon, promptly after such judgment becomes final; provided, however, that in
any event each such contest shall be concluded and the Impositions, penalties,
interest and costs shall be paid prior to the date (i) any criminal action may
be instituted against Landlord or its directors, officers or employees because
of the nonpayment thereof or (ii) any writ or order is issued under which any
property owned or leased by Landlord (including the Leased Property) may be
seized or sold or any other action may be taken against Landlord or any property
owned or leased by Landlord because of the nonpayment thereof.
(q) Repair, Maintenance, Alterations and Additions. Tenant
shall keep the Leased Property in good order, repair, operating condition and
appearance (ordinary wear and tear excepted), causing all necessary repairs,
renewals, replacements, additions and improvements to be promptly made, and will
not allow any of the Leased Property to be materially misused, abused or wasted
or to deteriorate. Tenant shall promptly replace any worn-out fixtures included
within the Leased Property with fixtures comparable to the replaced fixtures
when new and repair any damage caused by the removal of such fixtures. Further,
Tenant shall not, without the prior written consent of Landlord, (i) remove from
the Leased Property any fixtures of significant value which were paid for with
(or for which reimbursement was provided to Tenant by) a Construction Advance,
except such as are replaced by Tenant by articles of equal value, free and clear
of any Lien (and for purposes of this clause "significant value" will mean any
fixture that has a value of more than $100,000 or that, when considered together
with all other fixtures removed and not replaced by Tenant by articles of equal
suitability and value, has an aggregate value of $500,000 or more) or (ii) make
any alteration to any Improvements, after the Initial Improvements are
constructed, which significantly reduces the fair market value or changes the
general character of the Leased Property, taken as a whole, or which impairs in
any significant manner the useful life or utility of the Improvements, taken as
whole. Upon request of Landlord made at any time when an Event of Default shall
have occurred and be continuing, Tenant shall deliver to Landlord an inventory
describing and showing the make, model, serial number and location of all
fixtures and personalty, if any, included in the Initial Improvements with a
certification by Tenant that such inventory is a true and complete schedule of
all such fixtures and personalty and that all items specified in the inventory
are covered hereby free and clear of any Lien other than the Permitted
Encumbrances described in Exhibit B.
(r) Insurance and Casualty. Throughout the Term, Tenant will
keep all Improvements (including all alterations, additions and changes made to
the Improvements) which are located within the Leased Property insured under an
all-risk property insurance policy (excluding from coverage damage by flood or
earthquake, but not excluding other perils normally included within the
definitions of extended coverage, vandalism and malicious mischief) in the
amount of one hundred percent (100%) of the replacement value with endorsements
for contingent liability from operation of building laws, increased cost of
construction and demolition costs which may be necessary to comply with building
laws. Tenant will be responsible for determining the amount of property
insurance to be maintained, but such coverage will be on an agreed value basis
to eliminate the effects of coinsurance. Such insurance shall be issued by an
insurance company or companies rated by the A.M. Best Company of Oldwick, New
Jersey as having a policyholder's rating of A or better and a reported financial
information rating of X or better. Any deductible applicable to such insurance
shall not exceed $500,000. Such insurance shall cover not only the value of
Tenant's interest in the Improvements, but also the interest of Landlord, and
such insurance shall include provisions that Landlord must be notified at least
ten (10) days prior to any cancellation or reduction of insurance coverage. With
this Lease Tenant shall deliver to Landlord a certificate from the applicable
insurer or its authorized agent evidencing the insurance required by this
subparagraph and any additional insurance which shall be taken out upon any part
of the Leased Property. Thereafter, Tenant shall deliver to Landlord
certificates from the applicable insurer or its authorized agent of renewals or
replacements of all such policies of insurance at least five (5) days before any
such insurance shall expire. Tenant further agrees that all such policies shall
provide that proceeds thereunder will be payable to Landlord as Landlord's
interest may appear. If Tenant fails to obtain any insurance required by this
Lease or to provide confirmation of any such insurance as required by this
Lease, Landlord shall be entitled (but not required) to obtain the insurance
that Tenant has failed to obtain or for which Tenant has not provided the
required confirmation and, without limiting Landlord's other remedies under the
circumstances, Landlord may require Tenant to reimburse Landlord for the cost of
such insurance and to pay interest thereon computed at the Default Rate from the
date such cost was paid by Landlord until the date of reimbursement by Tenant.
In the event any of the Leased Property is destroyed or damaged by fire,
explosion, windstorm, hail or by any other casualty against which insurance
shall have been required hereunder, (i) Landlord may, but shall not be obligated
to, make proof of loss if not made promptly by Tenant, (ii) each insurance
company concerned is hereby authorized and directed to make payment for such
loss directly to Landlord for application as required by Paragraph 4, and (iii)
Landlord's consent must be obtained for any settlement, adjustment or compromise
of any claims for loss, damage or destruction under any policy or policies of
insurance (provided, that if any such claim is for less than $2,000,000 and no
Event of Default shall have occurred and be continuing, Tenant alone shall have
the right to settle, adjust or compromise the claim as Tenant deems appropriate;
and, provided further, that any disagreement between Landlord and Tenant about
the amount for which any such claim should be settled shall, at the request of
either party, be resolved as provided in Exhibit I, unless an Event of Default
shall have occurred and be continuing, in which case Landlord alone shall have
the right to settle, adjust or compromise the claim as Landlord deems
appropriate). If any casualty shall result in damage to or loss or destruction
of the Leased Property in excess of $1,000,000, Tenant shall give immediate
notice thereof to Landlord and Paragraph 4 shall apply. Notwithstanding the
foregoing provisions of this subparagraph, if insurance proceeds totaling not
more than $2,000,000 are to be recovered as a result of a fire or other casualty
involving the Leased Property, Tenant shall be entitled to receive directly and
hold such proceeds so long as no Event of Default shall have occurred and be
continuing and so long as Tenant applies such proceeds towards the restoration,
replacement and repair of the Leased Property as required by Paragraph 4.(b).
(s) Condemnation. Immediately upon obtaining knowledge of
the institution of any proceedings for the condemnation of the Leased Property
or any portion thereof, or any other similar governmental or quasi-governmental
proceedings arising out of injury or damage to the Leased Property or any
portion thereof, Tenant shall notify Landlord of the pendency of such
proceedings. Tenant shall, at its expense, diligently prosecute any such
proceedings and shall consult with Landlord, its attorneys and experts and
cooperate with them as reasonably requested in the carrying on or defense of any
such proceedings. All proceeds of condemnation awards or proceeds of sale in
lieu of condemnation with respect to the Leased Property and all judgments,
decrees and awards for injury or damage to the Leased Property shall be paid to
Landlord and applied as provided in Paragraph 4 above. Landlord is hereby
authorized, in the name of Tenant, to execute and deliver valid acquittances
for, and to appeal from, any such judgment, decree or award concerning
condemnation of any of the Leased Property. Landlord shall not be, in any event
or circumstances, liable or responsible for failure to collect, or to exercise
diligence in the collection of, any such proceeds, judgments, decrees or awards.
Notwithstanding the foregoing provisions of this subparagraph, if condemnation
proceeds totaling not more than $2,000,000 are to be recovered as a result of a
taking of less than all or substantially all of the Leased Property, Tenant may
directly receive and hold such proceeds so long as no Event of Default shall
have occurred and be continuing and so long as Tenant applies such proceeds
towards the restoration, replacement and repair of the remainder of the Leased
Property as required by Paragraph 4.(b).
(t) Protection and Defense of Title. If any encumbrance or
title defect whatsoever affecting Landlord's fee interest in the Leased Property
is claimed or discovered (excluding Permitted Encumbrances, this Lease and any
other encumbrance which is claimed by Landlord or lawfully claimed through or
under Landlord and which is not claimed by, through or under Tenant) or if any
legal proceedings are instituted with respect to title to the Leased Property,
Tenant shall give prompt written notice thereof to Landlord and at Tenant's own
cost and expense will promptly cause the removal of any such encumbrance and
cure any such defect and will take all necessary and proper steps for the
defense of any such legal proceedings, including but not limited to the
employment of counsel, the prosecution or defense of litigation and the release
or discharge of all adverse claims. If Tenant fails to promptly remove any such
encumbrance or title defect (other than a Lien Tenant is contesting as expressly
permitted by and in accordance with subparagraph 9.(o) or subparagraph 9.(p)),
Landlord (whether or not named as a party to legal proceedings with respect
thereto) shall be entitled to take such additional steps as in its judgment may
be necessary or proper to remove such encumbrance or cure such defect or for the
defense of any such attack or legal proceedings or the protection of Landlord's
interest in the Leased Property, including but not limited to the employment of
counsel, the prosecution or defense of litigation, the compromise or discharge
of any adverse claims made with respect to the Leased Property, the removal of
prior liens or security interests, and all expenses (including Attorneys' Fees)
so incurred of every kind and character shall be a demand obligation owing by
Tenant.
(u) No Liens on the Leased Property. Tenant shall not,
without the prior written consent of Landlord, create, place or permit to be
created or placed, or through any act or failure to act, acquiesce in the
placing of, or allow to remain, any Lien (except the lien for property taxes or
assessments assessed against the Leased Property which are not delinquent and
any Lien Tenant is contesting as expressly permitted by and in accordance with
subparagraph 9.(o) or subparagraph 9.(p)), against or covering the Leased
Property or any part thereof (other than any Lien which is lawfully claimed
through or under Landlord and which is not claimed by, through or under Tenant)
regardless of whether the same are expressly or otherwise subordinate to this
Lease or Landlord's interest in the Leased Property, and should any prohibited
Lien exist or become attached hereafter in any manner to any part of the Leased
Property without the prior written consent of Landlord, Tenant shall cause the
same to be promptly discharged and released to the satisfaction of Landlord.
(v) Books and Records. Tenant shall keep books and records
that are accurate and complete in all material respects for the construction and
maintenance of the Leased Property and will permit all such books and records
(including without limitation all contracts, statements, invoices, bills and
claims for labor,
materials and services supplied for the construction and operation of any
Improvements) to be inspected and copied by Landlord and its duly accredited
representatives at all times during reasonable business hours; provided that so
long as Tenant remains in possession of the Leased Property, Landlord or
Landlord's representative will, before making any such inspection or copying any
such documents, if then requested to do so by Tenant to maintain Tenant's
security: (i) sign in at Tenant's security or information desk if Tenant has
such a desk on the premises, (ii) wear a visitor's badge or other reasonable
identification provided by Tenant when Landlord or Landlord's representative
first arrives at the Leased Property, (iii) permit an employee of Tenant to
observe such inspection or work, and (iv) comply with other similar reasonable
nondiscriminatory security requirements of Tenant that do not, individually or
in the aggregate, interfere with or delay inspections or copying by Landlord
authorized by this subparagraph. This subparagraph shall not be construed as
requiring Tenant to regularly maintain separate books and records relating
exclusively to the Leased Property; provided, however, that if requested by
Landlord at any time when an Event of Default shall have occurred and be
continuing, Tenant shall construct or abstract from its regularly maintained
books and records information required by this subparagraph relating to the
Leased Property.
(w) Financial Statements; Required Notices; Certificates as
to Default. Tenant shall deliver to Landlord and to each Participant of which
Tenant has been notified:
(i) as soon as available and in any event within one hundred
twenty (120) days after the end of each fiscal year of Tenant, a
consolidated balance sheet of Tenant and its consolidated Subsidiaries
as of the end of such fiscal year and a consolidated income statement
and statement of cash flows of Tenant and its consolidated Subsidiaries
for such fiscal year, all in reasonable detail and all prepared in
accordance with GAAP and accompanied by a report and opinion of
accountants of national standing selected by Tenant, which report and
opinion shall be prepared in accordance with generally accepted auditing
standards and shall not be subject to any qualifications or exceptions
as to the scope of the audit nor to any qualification or exception which
Landlord determines, in Landlord's reasonable discretion, is
unacceptable; provided, that notwithstanding the foregoing, for so long
as Tenant is a company subject to the periodic reporting requirements of
Section 12 of the Securities Exchange Act of 1934, as amended, Tenant
shall be deemed to have satisfied its obligations under this clause (i)
so long as Tenant delivers to Landlord the same annual report and report
and opinion of accountants that Tenant delivers to its shareholders;
(ii) as soon as available and in any event within sixty (60)
days after the end of each of the first three quarters of each fiscal
year of Tenant, the consolidated balance sheet of Tenant and its
consolidated Subsidiaries as of the end of such quarter and the
consolidated income statement and the consolidated statement of cash
flows of Tenant and its consolidated Subsidiaries for the period
commencing at the end of the previous fiscal year and ending with the
end of such quarter, all in reasonable detail and all prepared in
accordance with GAAP and certified by a Responsible Financial Officer of
Tenant (subject to year-end adjustments); provided, that notwithstanding
the foregoing, for so long as Tenant is a company subject to the
periodic reporting requirements of Section 12 of the Securities Exchange
Act of 1934, as amended, Tenant shall be deemed to have satisfied its
obligations under this clause (ii) so long as Tenant delivers to
Landlord the same quarterly reports, certified by a Responsible
Financial Officer of Tenant (subject to year-end adjustments), that
Tenant delivers to its shareholders;
(iii) together with the financial statements furnished in
accordance with subparagraph 9.(w)(ii) and 9.(w)(i), a certificate of a
Responsible Financial Officer of Tenant in substantially the form
attached hereto as Exhibit G: (i) certifying that to the knowledge of
Tenant no Default or Event of Default under this Lease has occurred and
is continuing or, if a Default or Event of Default has occurred and is
continuing, a brief statement as to the nature thereof and the action
which is proposed to be taken with respect thereto, (ii) certifying that
the representations of Tenant set forth in Paragraph 9 of this Lease are
true and correct
in all material respects as of the date thereof as though made on and as
of the date thereof or, if not then true and correct, a brief statement
as to why such representations are no longer true and correct, and (iii)
with computations demonstrating compliance with the following Sections
of the Revolving Credit Agreement: Section 7.02 (which establishes a
minimum tangible net worth requirement), Section 7.03 (which establishes
a quick ratio requirement), Section 7.04 (which establishes a maximum
permitted ratio of total liabilities to tangible net worth), Section
7.06 (which establishes a limit on permitted dividends as a percentage
of earnings), and Section 7.10 (which establishes a limit on permitted
losses);
(iv) promptly after the sending or filing thereof, copies of
all proxy statements, financial statements and reports which Tenant
sends to Tenant's stockholders, and copies of all regular, periodic and
special reports, and all registration statements (other than
registration statements on Form S-8 or any form substituted therefor)
which Tenant files with the Securities and Exchange Commission or any
governmental authority which may be substituted therefor, or with any
national securities exchange;
(v) as soon as possible and in any event within five (5)
Business Days after a Responsible Financial Officer of Tenant becomes
aware of the occurrence of each Default or Event of Default, a statement
of a Responsible Financial Officer of Tenant setting forth details of
such Default or Event of Default and the action which Tenant has taken
and proposes to take with respect thereto;
(vi) upon request by Landlord, a statement in writing
certifying that this Lease is unmodified and in full effect (or, if
there have been modifications, that this Lease is in full effect as
modified, and setting forth such modifications) and the dates to which
the Base Rent has been paid and either stating that to the knowledge of
Tenant no Default or Event of Default under this Lease has occurred and
is continuing or, if a Default or Event of Default under this Lease has
occurred and is continuing, a brief statement as to the nature thereof;
it being intended that any such statement by Tenant may be relied upon
by any prospective purchaser or mortgagee of the Leased Property and by
any Participant;
(vii) copies of all notices required by Sections 6.01 or 6.07
of the Revolving Credit Agreement; and
(viii) such other information respecting the condition or
operations, financial or otherwise, of Tenant, of any of its
Subsidiaries or of the Leased Property as Landlord or any Participant
through Landlord may from time to time reasonably request.
Landlord is hereby authorized to deliver a copy of any information or
certificate delivered to it pursuant to this subparagraph 9.(w) to any
Participant and to any regulatory body having jurisdiction over Landlord that
requires or requests it.
(x) Further Assurances. Tenant shall, on request of
Landlord, (i) promptly correct any defect, error or omission which may be
discovered in the contents of this Lease or in any other instrument executed in
connection herewith or in the execution or acknowledgment thereof; (ii) execute,
acknowledge, deliver and record or file such further instruments and do such
further acts as may be necessary, desirable or proper to carry out more
effectively the purposes of this Lease and to subject to this Lease any property
intended by the terms hereof to be covered hereby including specifically, but
without limitation, any renewals, additions, substitutions, replacements or
appurtenances to the Leased Property; (iii) execute, acknowledge, deliver,
procure and record or file any document or instrument deemed advisable by
Landlord to protect its rights in and to the Leased Property against the rights
or interests of third persons; and (iv) provide such certificates, documents,
reports, information, affidavits and other instruments and do such further acts
as may be necessary, desirable or proper in the reasonable determination of
Landlord to enable Landlord, Landlord's Lender and any Participants to comply
with the requirements or requests of the Federal Reserve Bank or any other bank
regulatory agency or authority or any other governmental agency or authority
having jurisdiction over them.
(y) Fees and Expenses; General Indemnification; Increased
Costs; and Capital Adequacy Charges.
(i) Except for any costs paid by Landlord with the proceeds
of the Initial Funding Advances as part of the Closing Costs, Tenant
shall pay (and shall indemnify and hold harmless Landlord, Landlord's
Lender and any Person claiming through Landlord by reason of a Permitted
Transfer from and against) all Losses incurred by Landlord or Landlord's
Lender or any Person claiming through Landlord through a Permitted
Transfer in connection with or because of (A) the ownership of any
interest in or operation of the Leased Property, (B) the negotiation or
administration of this Lease, the Purchase Agreement, the Pledge
Agreement, the Environmental Indemnity or any Participation Agreements
with Participants which Tenant shall have approved, (C) the making of
Funding Advances, including Attorneys' Fees or other costs incurred to
evaluate lien releases and other information submitted by Tenant with
requests for Construction Advances, or (D) the construction of the
Initial Improvements, whether such Losses are incurred at the time of
execution of this Lease or at any time during the Term. Costs and
expenses included in such Losses may include, without limitation, all
appraisal fees, filing and recording fees, inspection fees, survey fees,
taxes (other than Excluded Taxes), brokerage fees and commissions,
abstract fees, title policy fees, Uniform Commercial Code search fees,
escrow fees, Attorneys' Fees and environmental consulting fees incurred
by Landlord with respect to the Leased Property. If Landlord pays or
reimburses Landlord's Lender for any such Losses, Tenant shall reimburse
Landlord for the same notwithstanding that Landlord may have already
received any payment from any Participant on account of such Losses, it
being understood that the Participant may expect repayment from Landlord
when Landlord does collect the required reimbursement from Tenant.
(ii) Tenant shall also pay (and indemnify and hold harmless
Landlord, Landlord's Lender and any Person claiming through Landlord by
reason of a Permitted Transfer from and against) all Losses, including
Attorneys' Fees, incurred or expended by Landlord or Landlord's Lender
or any Person claiming through Landlord through a Permitted Transfer or
in connection with (A) the breach by Tenant of any covenant of Tenant
herein or in any other instrument executed in connection herewith or (B)
Landlord's exercise in a lawful manner of any of Landlord's remedies
hereunder or under Applicable Law or Landlord's protection of the Leased
Property and Landlord's interest therein as permitted hereunder or under
Applicable Law. (However, the indemnity in the preceding sentence shall
not be construed to make Tenant liable to both Landlord and any
Participant or other party claiming through Landlord for the same
damages. For example, so long as Landlord remains entitled to recover
any past due Base Rent from Tenant, no Participant shall be entitled to
collect a percentage of the same Base Rent from Tenant.) Tenant shall
further indemnify and hold harmless Landlord and all other Indemnified
Parties against, and reimburse them for, all Losses which may be imposed
upon, asserted against or incurred or paid by them by reason of, on
account of or in connection with any bodily injury or death or damage to
the property of third parties occurring in or upon or in the vicinity of
the Leased Property through any cause whatsoever. THE FOREGOING
INDEMNITY FOR INJURY, DEATH OR PROPERTY DAMAGE SHALL APPLY EVEN WHEN
INJURY, DEATH OR PROPERTY DAMAGE IN, ON OR IN THE VICINITY OF THE LEASED
PROPERTY RESULTS IN WHOLE OR IN PART FROM THE ORDINARY NEGLIGENCE (AS
DEFINED ABOVE) OF AN INDEMNIFIED PARTY; provided, such indemnity shall
not apply to Losses suffered by an Indemnified Party that were
proximately caused by (and attributed by any applicable principles of
comparative fault to) the Active Negligence, gross negligence or wilful
misconduct of such Indemnified Party.
(iii) If, after the date hereof, due to either (A) the
introduction of or any change (other than any change by way of
imposition or increase of reserve requirements included in the
Eurodollar Rate Reserve Percentage) in or in the interpretation of any
law or regulation or (B) the compliance with any guideline or request
from any central bank or other governmental authority (whether or not
having the force of law), there shall be any increase in the cost to
Landlord's Lender or any Participant of agreeing to make or making,
funding or maintaining advances to Landlord in connection with the
Leased Property, then Tenant shall from time to time, upon demand by
Landlord pay to Landlord for the account of Landlord's Lender or such
Participant, as the case may be, additional amounts sufficient to
compensate Landlord's Lender or the Participant for such increased cost.
A certificate as to the amount of such increased cost, submitted to
Landlord and Tenant by Landlord's Lender or the Participant, shall be
conclusive and binding for all purposes, absent clear and demonstrable
error.
(iv) Landlord's Lender or any Participant may demand
additional payments (herein called "CAPITAL ADEQUACY CHARGES") if
Landlord's Lender or the Participant determines that any law or
regulation or any guideline or request from any central bank or other
governmental authority (whether or not having the force of law) affects
the amount of capital to be maintained by it and that the amount of such
capital is increased by or based upon the existence of advances made or
to be made to Landlord to permit Landlord to maintain Landlord's
investment in the Leased Property or to make Construction Advances. To
the extent that Landlord's Lender or the Participant demands Capital
Adequacy Charges as compensation for the additional capital requirements
reasonably allocable to such advances, Tenant shall pay to Landlord for
the account of the Landlord's Lender or the Participant, as the case may
be, the amount so demanded.
(v) Any amount to be paid to Landlord, Landlord's Lender or
any Indemnified Party under this subparagraph 9.(y) shall be a demand
obligation owing by Tenant. Tenant's indemnities and obligations under
this subparagraph 9.(y) shall survive the termination or expiration of
this Lease with respect to any circumstance or event existing or
occurring prior to such termination or expiration.
(z) Liability Insurance. Tenant shall maintain one or more
policies of commercial general liability insurance against claims for bodily
injury or death and property damage occurring or resulting from any occurrence
in or upon the Leased Property, in standard form and with an insurance company
or companies rated by the A.M. Best Company of Oldwick, New Jersey as having a
policyholder's rating of A or better and a reported financial information rating
of X or better, such insurance to afford immediate protection, to the aggregate
limit of not less than $10,000,000 combined single limit for bodily injury and
property damage in respect of any one accident or occurrence, with not more than
$500,000 self-insured retention. Such commercial general liability insurance
shall include blanket contractual liability coverage which insures contractual
liability under the indemnifications set forth in this Lease (other than the
indemnifications set forth in Paragraph 12 concerning environmental matters),
but such coverage or the amount thereof shall in no way limit such
indemnifications. The policy evidencing such insurance shall name as additional
insureds Landlord and all Participants of which Tenant has been notified. Tenant
shall maintain with respect to each policy or agreement evidencing such
commercial general liability insurance such endorsements as may be reasonably
required by Landlord and shall at all times deliver and maintain with Landlord
written confirmation (in form satisfactory to Landlord) with respect to such
insurance from the applicable insurer or its authorized agent, which
confirmation must provide that insurance coverage will not be canceled or
reduced without at least ten (10) days notice to Landlord. Not less than five
(5) days prior to the expiration date of each policy of insurance required of
Tenant pursuant to this subparagraph, Tenant shall deliver to Landlord a
certificate evidencing a paid renewal policy or policies.
(aa) Permitted Encumbrances. Except to the extent expressly
required of Landlord by subparagraph 10.(b), Tenant shall comply with and will
cause to be performed all of the covenants, agreements and obligations imposed
upon the owner of any interest in the Leased Property in the Permitted
Encumbrances in
accordance with their respective terms and provisions. Tenant shall not modify
or permit any modification of any Permitted Encumbrance without the prior
written consent of Landlord. Such consent will not be unreasonably withheld for
the modification of any Permitted Encumbrance that has been made expressly
subject to this Lease, as modified from time to time, and subordinate to
Landlord's interest in the Leased Property by agreement in form satisfactory to
Landlord.
(bb) Environmental.
(i) Environmental Covenants. Tenant covenants:
a) not to cause or permit the Leased Property to be in
violation of, or do anything or permit anything to be done which
will subject the Leased Property to any remedial obligations
under, any Environmental Laws, including without limitation
CERCLA and RCRA, assuming disclosure to the applicable
governmental authorities of all relevant facts, conditions and
circumstances pertaining to the Leased Property;
b) not to conduct or authorize others to conduct
Hazardous Substance Activities on the Leased Property, except
Permitted Hazardous Substance Use;
c) to the extent required by Environmental Laws, to
remove Hazardous Substances from the Leased Property (or if
removal is prohibited by law, to take whatever action is
required by law) promptly upon discovery; and
d) not to discharge or authorize the discharge of
anything (including Permitted Hazardous Substances) from the
Leased Property into groundwater or surface water that would
require any permit under applicable Environmental Laws, other
than storm water runoff.
If Tenant's failure to cure any breach of the covenants listed above in
this subparagraph (i) continues beyond the Environmental Cure Period (as
defined below), Landlord may, in addition to any other remedies
available to it, after notifying Tenant of the remediation efforts
Landlord believes are needed, cause the Leased Property to be freed from
all Hazardous Substances (or if removal is prohibited by law, to take
whatever action is required by law), and the cost of the removal shall
be a demand obligation owing by Tenant to Landlord. Further, subject to
the provisions of subparagraph 12.(c) below, Tenant agrees to indemnify
Landlord against all Losses incurred by or asserted or proven against
Landlord in connection therewith. As used in this subparagraph,
"ENVIRONMENTAL CURE PERIOD" means the period ending on the earlier of:
(1) one hundred and eighty days (180) after Tenant is notified of the
breach which must be cured within such period, or such longer period as
is reasonably required for any cure that Tenant pursues with diligence
pursuant to and in accordance with an Approved Plan (as defined below),
(2) the date any writ or order is issued for the levy or sale of any
property owned or leased by Landlord (including the Leased Property) or
any criminal action is instituted against Landlord or any of its
directors, officers or employees because of the breach which must be
cured within such period, (3) the end of the Term. As used in this
subparagraph, an "APPROVED PLAN" means a plan of remediation of a
violation of Environmental Laws for which Tenant has obtained, within
one hundred and eighty days (180) after Tenant is notified of the
applicable breach of the covenants listed above in this subparagraph
(i), the written approval of the governmental authority with primary
jurisdiction over the violation and with respect to which no other
governmental authority asserting jurisdiction has claimed such plan is
inadequate.
(ii) Environmental Inspections and Reviews. Landlord reserves
the right to retain an independent professional consultant to review any
report prepared by Tenant or to conduct Landlord's own
investigation to confirm whether Hazardous Substances Activities or the
discharge of anything into groundwater or surface water has occurred in
violation of the preceding subparagraph (i), but Landlord's right to
reimbursement for the fees of such consultant shall be limited to the
following circumstances: (1) an Event of Default shall have occurred;
(2) Landlord shall have retained the consultant to establish the
condition of the Leased Property just prior to any conveyance thereof
pursuant to the Purchase Agreement or just prior to the expiration of
this Lease; (3) Landlord shall have retained the consultant to satisfy
any regulatory requirements applicable to Landlord or its Affiliates; or
(4) Landlord shall have retained the consultant because Landlord has
been notified of a violation of Environmental Laws concerning the Leased
Property or Landlord otherwise reasonably believes that Tenant has not
complied with the preceding subparagraph (i). Tenant grants to Landlord
and to Landlord's agents, employees, consultants and contractors the
right during reasonable business hours and after reasonable notice to
enter upon the Leased Property to inspect the Leased Property and to
perform such tests as are reasonably necessary or appropriate to conduct
a review or investigation of Hazardous Substances on, or any discharge
into groundwater or surface water from, the Leased Property. Without
limiting the generality of the foregoing, Tenant agrees that Landlord
will have the same right, power and authority to enter and inspect the
Leased Property as is granted to a secured lender under Section 2929.5
of the California Civil Code. Tenant shall promptly reimburse Landlord
for the cost of any such inspections and tests, but only when the
inspections and tests are (1) ordered by Landlord after an Event of
Default; (2) ordered by Landlord to establish the condition of the
Leased Property just prior to any conveyance thereof pursuant to the
Purchase Agreement or just prior to the expiration of this Lease; (3)
ordered by Landlord to satisfy any regulatory requirements applicable to
Landlord or its Affiliates; or (4) ordered because Landlord has been
notified of a violation of Environmental Laws concerning the Leased
Property or Landlord otherwise reasonably believes that Tenant has not
complied with the preceding subparagraph (i).
(iii) Notice of Environmental Problems. Tenant shall
immediately advise Landlord of (i) any discovery of any event or
circumstance which would render any of the representations contained in
subparagraph 9.(e) inaccurate in any material respect if made at the
time of such discovery, (ii) any remedial action taken by Tenant in
response to any (A) discovery of any Hazardous Substances other than
Permitted Hazardous Substances on, under or about the Leased Property or
(B) any claim for damages resulting from Hazardous Substance Activities,
(iii) Tenant's discovery of any occurrence or condition on any real
property adjoining or in the vicinity of the Leased Property which could
cause the Leased Property or any part thereof to be subject to any
ownership, occupancy, transferability or use restrictions under
Environmental Laws, or (iv) any investigation or inquiry affecting the
Leased Property by any governmental authority in connection with any
Environmental Laws. In such event, Tenant shall deliver to Landlord
within thirty (30) days after Landlord's request, a preliminary written
environmental plan setting forth a general description of the action
that Tenant proposes to take with respect thereto, if any, to bring the
Leased Property into compliance with Environmental Laws or to correct
any breach by Tenant of the covenants listed above in subparagraph (i),
including, without limitation, any proposed corrective work, the
estimated cost and time of completion, the name of the contractor and a
copy of the construction contract, if any, and such additional data,
instruments, documents, agreements or other materials or information as
Landlord may reasonably request.
(cc) Compliance with Financial Covenants and Certain Other
Requirements Established by the Revolving Credit Agreement. So long as Tenant
shall continue to have any obligations under this Lease or the Purchase
Agreement, Tenant shall comply with each and every requirement set forth in
Article VII of the Credit Agreement dated as of April 30, 1994, by and among
Tenant, as borrower, and Bank of America National Trust and Savings Association,
as lender, as amended by the First Amendment to Credit Agreement dated December
31, 1994 between Tenant and such lender and by the Second Amendment to Credit
Agreement dated February 15, 1995 between Tenant and such lender (the "REVOLVING
CREDIT AGREEMENT"). A true and correct copy of such Revolving Credit Agreement
has been delivered by Tenant to Landlord. To the extent that any of the
requirements set forth in other provisions of this Lease, in the Environmental
Indemnity or in the Purchase Agreement are more stringent than the requirements
set forth in the Revolving Credit Agreement (for example, more stringent
requirements concerning Tenant's use of the Leased Property itself in compliance
with Environmental Laws), the more stringent requirements set forth herein or in
the Environmental Indemnity or in the Purchase Agreement shall control. Further,
for purposes of determining Tenant's compliance with requirements established in
this Lease by reference to the Revolving Credit Agreement, and for purposes of
establishing the meaning of capitalized terms defined herein by reference to the
Revolving Credit Agreement, such requirements and definitions shall be construed
as if (1) the Revolving Credit Agreement were continuing after any expiration or
termination thereof, (2) no modifications or waivers of the Revolving Credit
Agreement were made or granted after the date of this Lease, and (3) no consents
or approvals were given for anything requiring a consent or approval by the
terms of the Revolving Credit Agreement, other than such consents or approvals
as Landlord shall have itself approved in writing in its capacity as the
landlord under this Lease. As used in the provisions of the Revolving Credit
Agreement referenced herein, capitalized terms shall have the meanings assigned
to them in the Revolving Credit Agreement itself.
(dd) ERISA.
(i) Each Plan is in compliance in all material respects
with, and has been administered in all material respects in compliance
with, the applicable provisions of ERISA, the Code and any other
applicable Federal or state law, and as of the date hereof no event or
condition is occurring or exists which would require a notice from
Tenant under clause 9.(ad)(ii).
(ii) Tenant shall provide a notice to Landlord as soon as
possible after, and in any event within ten (10) days after Tenant
becomes aware that, any of the following has occurred, with respect to
which the potential aggregate liability to Tenant relating thereto is
$2,000,000 or more, and such notice shall include a statement signed by
a senior financial officer of Tenant setting forth details of the
following and the response, if any, which Tenant or its ERISA Affiliate
proposes to take with respect thereto (and a copy of any report or
notice required to be filed with or given to Pension Benefit Guaranty
Corporation by Tenant or an ERISA Affiliate with respect to any of the
following or the events or conditions leading up to it): (A) the
assertion, to secure any Unfunded Benefit Liabilities, of any Lien
against the assets of Tenant, against the assets of any Plan of Tenant
or any ERISA Affiliate of Tenant or against any interest of Landlord or
Tenant in the Leased Property or the collateral covered by the Pledge
Agreement, or (B) the taking of any action by the Pension Benefit
Guaranty Corporation or any other governmental authority action against
Tenant to terminate any Plan of Tenant or any ERISA Affiliate of Tenant
or to cause the appointment of a trustee or receiver to administer any
such Plan.
11. Representations, Warranties and Covenants of Landlord. Landlord
represents, warrants and covenants as follows:
(a) Title Claims By, Through or Under Landlord. Except by a
Permitted Transfer, Landlord shall not assign, transfer, mortgage, pledge,
encumber or hypothecate this Lease or any interest of Landlord in and to the
Leased Property during the Term without the prior written consent of Tenant.
Landlord further agrees that if any encumbrance or title defect affecting the
Leased Property is lawfully claimed through or under Landlord, including any
judgment lien lawfully filed against Landlord, Landlord will at its own cost and
expense remove any such encumbrance and cure any such defect; provided, however,
Landlord shall not be responsible for (i) any Permitted Encumbrances (regardless
of whether claimed through or under Landlord) or any other encumbrances not
lawfully claimed through or under Landlord, (ii) any encumbrances or title
defects claimed by, through or under Tenant or any Participant which Tenant
shall have approved, or (iii) any encumbrance or title defect arising because of
Landlord's compliance with subparagraph 10.(b) or any request made by Tenant.
(b) Actions Required of the Title Holder. So long as no
Event of Default shall have occurred and be continuing, Landlord shall take any
and all action required of Landlord by the Permitted Encumbrances or otherwise
required of Landlord by Applicable Laws or reasonably requested by Tenant
(including granting any utility easements required in connection with
construction of Improvements); provided that (i) actions Tenant may require of
Landlord under this subparagraph shall be limited to actions that can only be
taken by Landlord as the owner of the fee interest in the Leased Property, as
opposed to any action that can be taken by Tenant or any third party (and the
payment of any monetary obligation shall not be an action required of Landlord
under this subparagraph unless Landlord shall first have received funds from
Tenant, in excess of any other amounts due from Tenant hereunder, sufficient to
pay such monetary obligations), (ii) Tenant requests the action to be taken by
Landlord (which request must be specific and in writing, if required by Landlord
at the time the request is made) and (iii) the action to be taken will not
constitute a violation of any Applicable Laws or compromise or constitute a
waiver of Landlord's rights hereunder or under the Purchase Agreement, the
Pledge Agreement or Environmental Indemnity or otherwise be reasonably
objectionable to Landlord. Any Losses incurred by Landlord because of any action
taken pursuant to this subparagraph shall be covered by the indemnification set
forth in subparagraph 9.(y). Further, for purposes of such indemnification, any
action taken by Landlord will be deemed to have been made at the request of
Tenant if made pursuant to any request of Tenant's counsel or of any officer of
Tenant (or with their knowledge, and without their objection) in connection with
the Existing Contract or any Construction Document.
(c) No Default or Violation. The execution, delivery and
performance of this Lease do not contravene, result in a breach of or constitute
a default under any material contract or agreement to which Landlord is a party
or by which Landlord is bound and do not, to the knowledge of Landlord, violate
or contravene any law, order, decree, rule or regulation to which Landlord is
subject.
(d) No Suits. To Landlord's knowledge there are no judicial
or administrative actions, suits or proceedings involving the validity,
enforceability or priority of this Lease, and to Landlord's knowledge no such
suits or proceedings are threatened.
(e) Organization. Landlord is duly incorporated and legally
existing under the laws of Delaware and is or, if necessary, will become duly
qualified to do business in the State of California. Landlord has or will
obtain, at Tenant's expense pursuant to the other provisions of this Lease, all
requisite power and all material governmental certificates of authority,
licenses, permits, qualifications and other documentation necessary to lease the
Leased Property and to perform its obligations under this Lease.
(f) Enforceability. The execution, delivery and performance
of this Lease, the Purchase Agreement and the Pledge Agreement by Landlord are
duly authorized, are not in contravention of or conflict with any term or
provision of Landlord's articles of incorporation or bylaws and do not, to
Landlord's knowledge, require the consent or approval of any governmental body
or other regulatory authority that has not heretofore been obtained or conflict
with any Applicable Laws. This Lease, the Purchase Agreement and the Pledge
Agreement are valid, binding and legally enforceable obligations of Landlord
except as such enforcement is affected by bankruptcy, insolvency and similar
laws affecting the rights of creditors, generally, and equitable principles of
general application; provided, Landlord makes no representation or warranty that
conditions imposed by any state or local Applicable Laws to the purchase,
ownership, lease or operation of the Leased Property have been satisfied.
(g) Existence. Landlord will continuously maintain its
existence and, after qualifying to do business in the State of California if
Landlord has not already done so, Landlord will continuously maintain its right
to do business in that state to the extent necessary for the performance of
Landlord's obligations hereunder.
(h) Not a Foreign Person. Landlord is not a "foreign person"
within the meaning of the Sections 1445 and 7701 of the Code (i.e., Landlord is
not a non-resident alien, foreign corporation, foreign partnership, foreign
trust or foreign estate as those terms are defined in the Code and regulations
promulgated thereunder), and Landlord is not subject to withholding under
California Revenue and Taxation Code Sections 18805, 18815, and 26131.
12. Assignment and Subletting.
(a) Consent Required. During the term of this Lease, without
the prior written consent of Landlord first had and received, Tenant shall not
assign, transfer, mortgage, pledge or hypothecate this Lease or any interest of
Tenant hereunder and shall not sublet all or any part of the Leased Property, by
operation of law or otherwise; provided, that : (1) Tenant shall be entitled
without Landlord's consent to sublet space in then existing and completed
Improvements if (i) any sublease by Tenant is made expressly subject and
subordinate to the terms hereof, (ii) such sublease has a term less than the
remainder of the then effective term of this Lease, and (iii) the use permitted
by such sublease is expressly limited to the uses permitted by Paragraph 9(a);
and (2) Tenant shall be entitled to assign this Lease to an Affiliate of Tenant
if both Tenant and its Affiliate confirm their joint and several liability
hereunder by notice given to Landlord in accordance with Paragraph 19.(a)
hereof.
(b) Standard for Landlord's Consent to Assignments and
Certain Other Matters. Consents and approvals of Landlord which are required by
the preceding subparagraph will not be unreasonably withheld, but Tenant
acknowledges, without limiting the reasons why Landlord might reasonably
withhold such consents or approvals, that Landlord's withholding of such consent
or approval shall be reasonable if Landlord determines in good faith that giving
the consent or approval may significantly increase Landlord's risk of liability
for any existing or future environmental problem. Further, Tenant acknowledges
that Landlord's withholding of such consent or approval shall be reasonable if
Landlord determines in good faith that giving the consent or approval would
negate Tenant's representations in this Lease regarding ERISA or cause this
Lease, the Purchase Agreement or other documents described herein or therein (or
any exercise of Landlord's rights hereunder or thereunder) to constitute a
violation of any provision of ERISA or of any applicable state statute
regulating a governmental plan.
(c) Consent Not a Waiver. No consent by Landlord to a sale,
assignment, transfer, mortgage, pledge or hypothecation of this Lease or
Tenant's interest hereunder, and no assignment or subletting of the Leased
Property or any part thereof in accordance with this Lease or otherwise with
Landlord's consent, shall release Tenant from liability hereunder; and any such
consent shall apply only to the specific transaction thereby authorized and
shall not relieve Tenant from any requirement of obtaining the prior written
consent of Landlord to any further sale, assignment, transfer, mortgage, pledge
or hypothecation of this Lease or any interest of Tenant hereunder.
(d) Landlord's Assignment. Landlord shall have the right to
transfer, assign and convey, in whole or in part, the Leased Property and any
and all of its rights under this Lease by any conveyance that constitutes a
Permitted Transfer. (However, any Permitted Transfer shall be subject to all of
the provisions of each and every agreement concerning the Leased Property then
existing between Landlord and Tenant, including without limitation this Lease
and the Purchase Agreement.) In the event Landlord sells or otherwise transfers
the Leased Property and assigns its rights under this Lease, the Purchase
Agreement and the Pledge Agreement, and if Landlord's successor in interest
confirms its liability for the obligations imposed upon Landlord by this Lease,
the Purchase Agreement and the Pledge Agreement on and subject to the express
terms and conditions set out herein and therein, then the original Landlord
shall thereby be released from any obligations thereafter arising under this
Lease, the Purchase Agreement and the Pledge Agreement, and Tenant agrees to
look solely to each successor in interest of Landlord for performance of such
obligations. However, notwithstanding anything to the contrary herein contained,
if withholding taxes are imposed on the rents and other amounts payable to
Landlord
hereunder because of Landlord's assignment of this Lease to any citizen of, or
any corporation or other entity formed under the laws of, a country other than
the United States, Tenant shall not be required to compensate such assignee for
the withholding tax.
13 Environmental Indemnification.
(a) Indemnity. Tenant hereby agrees to assume liability for
and to pay, indemnify, defend, and hold harmless each and every Indemnified
Party from and against any and all Environmental Losses, subject only to the
provisions of subparagraph 12.(c) below.
(b) Assumption of Defense.
(i) If an Indemnified Party notifies Tenant of any
claim, demand, action, administrative or legal proceeding, investigation
or allegation as to which the indemnity provided for in this Paragraph
12 applies, Tenant shall assume on behalf of the Indemnified Party and
conduct with due diligence and in good faith the investigation and
defense thereof and the response thereto with counsel selected by Tenant
but reasonably satisfactory to the Indemnified Party; provided, that the
Indemnified Party shall have the right to be represented by advisory
counsel of its own selection and at its own expense; and provided
further, that if any such claim, demand, action, proceeding,
investigation or allegation involves both Tenant and the Indemnified
Party and the Indemnified Party shall have been advised in writing by
counsel that there may be legal defenses available to it which are
inconsistent with those available to Tenant, then the Indemnified Party
shall have the right to select separate counsel to participate in the
investigation and defense of and response to such claim, demand, action,
proceeding, investigation or allegation on its own behalf, and Tenant
shall pay or reimburse the Indemnified Party for all Attorney's Fees
incurred by the Indemnified Party because of the selection of such
separate counsel.
(ii) If any claim, demand, action, proceeding,
investigation or allegation arises as to which the indemnity provided
for in this Paragraph 12 applies, and Tenant fails to assume promptly
(and in any event within fifteen (15) days after being notified of the
claim, demand, action, proceeding, investigation or allegation) the
defense of the Indemnified Party, then the Indemnified Party may contest
(or settle, with the prior written consent of Tenant, which consent will
not be unreasonably withheld) the claim, demand, action, proceeding,
investigation or allegation at Tenant's expense using counsel selected
by the Indemnified Party; provided, that if any such failure by Tenant
continues for thirty (30) days or more after Tenant is notified thereof,
no such contest need be made by the Indemnified Party and settlement or
full payment of any claim may be made by the Indemnified Party without
Tenant's consent and without releasing Tenant from any obligations to
the Indemnified Party under this Paragraph 12 so long as, in the written
opinion of reputable counsel to the Indemnified Party, the settlement or
payment in full is clearly advisable.
(c) Notice of Environmental Losses. If an Indemnified Party
receives a written notice of Environmental Losses that such Indemnified Party
believes are covered by this Paragraph 12, then such Indemnified Party will be
expected to promptly furnish a copy of such notice to Tenant. The failure to so
provide a copy of the notice to Tenant shall not excuse Tenant from its
obligations under this Paragraph 12; provided, that if Tenant is unaware of the
matters described in the notice and such failure renders unavailable defenses
that Tenant might otherwise assert, or precludes actions that Tenant might
otherwise take, to minimize its obligations hereunder, then Tenant shall be
excused from its obligation to indemnify such Indemnified Party (and any
Affiliate of such Indemnified Party) against Environmental Losses, if any, which
would not have been incurred but for such failure. For example, if Landlord
fails to provide Tenant with a copy of a notice of an obligation covered by the
indemnity set out in subparagraph 12.(a) and Tenant is not otherwise already
aware of such obligation, and if as a result of such failure Landlord becomes
liable for penalties and interest covered by
the indemnity in excess of the penalties and interest that would have accrued if
Tenant had been promptly provided with a copy of the notice, then Tenant will be
excused from any obligation to Landlord (or any Affiliate of Landlord) to pay
the excess.
(d) Rights Cumulative. The rights of each Indemnified Party
under this Paragraph 12 shall be in addition to any other rights and remedies of
such Indemnified Party against Tenant under the other provisions of this Lease
or under any other document or instrument now or hereafter executed by Tenant,
or at law or in equity (including, without limitation, any right of
reimbursement or contribution pursuant to CERCLA).
(e) Survival of the Indemnity. Tenant's obligations under
this Paragraph 12 shall survive the termination or expiration of this Lease. All
obligations of Tenant under this Paragraph 12 shall be payable upon demand, and
any amount due upon demand to any Indemnified Party by Tenant which is not paid
shall bear interest from the date of such demand at a floating interest rate
equal to the Default Rate, but in no event in excess of the maximum rate
permitted by law.
14. Landlord's Right of Access and Right to Perform.
(a) Landlord and Landlord's representatives may enter the
Leased Property, after five (5) Business Days advance written notice to Tenant
(except in the event of an emergency, when no advance notice will be required),
for the purpose of making inspections or performing any work Landlord is
authorized to undertake by the next subparagraph. So long as Tenant remains in
possession of the Leased Property, Landlord or Landlord's representative will,
before making any such inspection or performing any such work on the Leased
Property, if then requested to do so by Tenant to maintain Tenant's security:
(i) sign in at Tenant's security or information desk if Tenant has such a desk
on the premises, (ii) wear a visitor's badge or other reasonable identification
provided by Tenant when Landlord or Landlord's representative first arrives at
the Leased Property, (iii) permit an employee of Tenant to observe such
inspection or work, and (iv) comply with other similar reasonable
nondiscriminatory security requirements of Tenant that do not, individually or
in the aggregate, interfere with or delay inspections or work of Landlord
authorized by this Lease.
(b) If Tenant fails to perform any act or to take any action
which hereunder Tenant is required to perform or take, or to pay any money which
hereunder Tenant is required to pay, and if such failure or action constitutes
an Event of Default or renders Landlord or any director, officer, employee or
Affiliate of Landlord at risk of criminal prosecution or renders Landlord's
interest in the Leased Property or any part thereof at risk of forfeiture by
forced sale or otherwise, then in addition to any other remedies specified
herein or otherwise available, Landlord may, in Tenant's name or in Landlord's
own name, perform or cause to be performed such act or take such action or pay
such money. Any expenses so incurred by Landlord, and any money so paid by
Landlord, shall be a demand obligation owing by Tenant to Landlord. Further,
Landlord, upon making such payment, shall be subrogated to all of the rights of
the person, corporation or body politic receiving such payment. But nothing
herein shall imply any duty upon the part of Landlord to do any work which under
any provision of this Lease Tenant may be required to perform, and the
performance thereof by Landlord shall not constitute a waiver of Tenant's
default. Landlord may during the progress of any such work permitted by Landlord
hereunder on or in the Leased Property keep and store upon the Leased Property
all necessary materials, tools, and equipment. Landlord shall not in any event
be liable for inconvenience, annoyance, disturbance, loss of business, or other
damage to Tenant or the subtenants of Tenant by reason of making such repairs or
the performance of any such work on or in the Leased Property, or on account of
bringing materials, supplies and equipment into or through the Leased Property
during the course of such work (except for liability in connection with death or
injury or damage to the property of third parties caused by the Active
Negligence, gross negligence or wilful misconduct of Landlord or its officers,
employees, or agents in connection therewith), and the obligations of Tenant
under this Lease shall not thereby be affected in any manner.
15. Events of Default.
(a) Definition of Event of Default. Each of the following
events shall be deemed to be an "EVENT OF DEFAULT" by Tenant under this Lease:
(i) Tenant shall fail to pay when due any
installment of Rent due hereunder and such failure shall
continue for three (3) Business Days after Tenant is notified
thereof.
(ii) Tenant shall fail to cause any representation or
warranty of Tenant contained herein that is false or misleading
in any material respect when made to be made true and not
misleading (other than as described in the other clauses of
this subparagraph 14.(a)), or Tenant shall fail to comply with
any term, provision or covenant of this Lease (other than as
described in the other clauses of this subparagraph 14.(a)),
and in either case shall not cure such failure prior to the
earlier of (A) thirty (30) days after written notice thereof is
sent to Tenant or (B) the date any writ or order is issued for
the levy or sale of any property owned or leased by Landlord
(including the Leased Property) or any criminal action is
instituted against Landlord or any of its directors, officers
or employees because of such failure; provided, however, that
so long as no such writ or order is issued and no such criminal
action is instituted, if such failure is susceptible of cure
but cannot with reasonable diligence be cured within such
thirty day period, and if Tenant shall promptly have commenced
to cure the same and shall thereafter prosecute the curing
thereof with reasonable diligence, the period within which such
failure may be cured shall be extended for such further period
(not to exceed an additional sixty (60) days) as shall be
necessary for the curing thereof with reasonable diligence.
(iii) Tenant shall fail to comply with any term,
provision or condition of the Purchase Agreement, the Pledge
Agreement or the Environmental Indemnity and such failure shall
continue after the last day of any applicable grace period
provided for therein.
(iv) Tenant shall abandon any portion of the Leased
Property.
(v) Tenant shall fail to make any payment or
payments of principal, premium or interest, on any Debt of
Tenant described in the next sentence when due (taking into
consideration the time Tenant may have to cure such failure, if
any, under the documents governing such Debt). As used in this
clause 14.(a)(v), "Debt" shall mean only Debts of Tenant now
existing or arising in the future (a) payable to Landlord or
any Participant or any Affiliate of Landlord or any
Participant, or (B) payable to any other Person and with
respect to which $3,000,000 or more is actually due and payable
because of acceleration or otherwise.
(vi) Tenant or any of its Subsidiaries shall
generally not pay its debts as such debts become due, or shall
admit in writing its inability to pay its debts generally, or
shall make a general assignment for the benefit of creditors;
or any proceeding shall be instituted by or against Tenant or
any of its Subsidiaries seeking to adjudicate it bankrupt or
insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of
it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking
the entry of an order for relief or the appointment of a
receiver, trustee, custodian or other similar official for it
or for any substantial part of its property and, in the case of
any such proceeding instituted against it (but not instituted
by it), either such proceeding shall remain undismissed or
unstayed for a period of thirty (30) consecutive days, or any
of the actions sought in such proceeding (including, without
limitation, the entry of an order for relief against, or the
appointment of a receiver, trustee, custodian or other similar
official for, it or for any substantial part of its property)
shall occur; or Tenant or any of its Subsidiaries shall take
any corporate action to authorize any of the actions set forth
above in this clause (vi).
(vii) Any order, judgment or decree is entered in any
proceedings against Tenant or any Subsidiary decreeing the
dissolution of Tenant or such Subsidiary and such order,
judgment or decree remains unstayed and in effect for more than
sixty (60) days.
(viii) Any order, judgment or decree is entered in any
proceedings against Tenant or any Subsidiary decreeing a
split-up of Tenant or such Subsidiary which requires the
divestiture of assets representing a substantial part, or the
divestiture of the stock of a Subsidiary whose assets represent
a substantial part, of the consolidated assets of Tenant and
its Subsidiaries (determined in accordance with GAAP) or which
requires the divestiture of assets, or stock of a Subsidiary,
which shall have contributed a substantial part of the
consolidated net income of Tenant and its Subsidiaries
(determined in accordance with GAAP) for any of the three
fiscal years then most recently ended, and such order, judgment
or decree remains unstayed and in effect for more than sixty
(60) days.
(ix) A final judgment or order for the payment of
money in an amount (not covered by insurance) which exceeds
$3,000,000 shall be rendered against Tenant or any of its
Subsidiaries and within sixty (60) days after the entry
thereof, such judgment or order is not discharged or execution
thereof stayed pending appeal, or within thirty (30) days after
the expiration of any such stay, such judgment is not
discharged.
(x) Any ERISA Termination Event that Landlord
determines might constitute grounds for the termination of any
Plan or for the appointment by the appropriate United States
district court of a trustee to administer any Plan shall have
occurred and be continuing thirty (30) days after written
notice to such effect shall have been given to Tenant by
Landlord, or any Plan shall be terminated, or a trustee shall
be appointed by an appropriate United States district court to
administer any Plan, or the Pension Benefit Guaranty
Corporation shall institute proceedings to terminate any Plan
or to appoint a trustee to administer any Plan.
(xi) A Change of Control Event not approved in
advance by Landlord shall occur.
(xii) An "Event of Default" as defined in the
Revolving Credit Agreement (taking into account any applicable
notice and cure period set forth therein) by Tenant shall
occur.
Notwithstanding the foregoing, any Default that could become an Event of Default
under clause 14.(a)(ii) may be cured within the earlier of the periods described
in clauses (A) and (B) thereof by Tenant's delivery to Landlord of a written
notice irrevocably exercising Tenant's option under the Purchase Agreement to
purchase Landlord's interest in the Leased Property and designating as the
Designated Payment Date the next following date which is either an Advance Date
or a Base Rent Date and which is at least ten (10) days after the date of such
notice; provided, however, Tenant must, as a condition to the effectiveness of
its cure, on the date so designated as the Designated Payment Date tender to
Landlord the full purchase price required by the Purchase Agreement and all Rent
and all other amounts then due or accrued and unpaid hereunder (including
reimbursement for any costs incurred by Landlord in connection with the
applicable Default hereunder, regardless of whether Landlord shall have been
reimbursed for such costs in whole or in part by any Participants) and Tenant
must also furnish written confirmation that all indemnities set forth herein
(including specifically, but without limitation, the general indemnity set forth
in subparagraph 9.(y) and the environmental indemnity set forth in Paragraph 12)
shall survive the payment of such amounts by Tenant to Landlord and the
conveyance of Landlord's interest in the Leased Property to Tenant.
(b) Remedies. Upon the occurrence of an Event of Default
which is not cured within any applicable period expressly permitted by
subparagraph 14.(a), at Landlord's option and without limiting
Landlord in the exercise of any other right or remedy Landlord may have on
account of such default, and without any further demand or notice except as
expressly described in this subparagraph 14.(b):
(i) By notice to Tenant, Landlord may terminate
Tenant's right to possession of the Leased Property. A notice given in
connection with unlawful detainer proceedings specifying a time within
which to cure a default shall terminate Tenant's right to possession if
Tenant fails to cure the default within the time specified in the
notice.
(ii) Upon termination of Tenant's right to possession
and without further demand or notice, Landlord may re-enter the Leased
Property and take possession of all improvements, additions,
alterations, equipment and fixtures thereon and remove any persons in
possession thereof. Any property in the Leased Property may be removed
and stored in a warehouse or elsewhere at the expense and risk of and
for the account of Tenant.
(iii) Upon termination of Tenant's right to
possession, this Lease shall terminate and Landlord may recover from
Tenant:
a) The worth at the time of award of the
unpaid Rent which had been earned at the time of termination;
b) The worth at the time of award of the
amount by which the unpaid Rent which would have been earned
after termination until the time of award exceeds the amount of
such rental loss that Tenant proves could have been reasonably
avoided;
c) The worth at the time of award of the
amount by which the unpaid Rent for the balance of the
scheduled Term after the time of award exceeds the amount of
such rental loss that Tenant proves could be reasonably
avoided; and
d) Any other amount necessary to compensate
Landlord for all the detriment proximately caused by Tenant's
failure to perform Tenant's obligations under this Lease or
which in the ordinary course of things would be likely to
result therefrom, including, but not limited to, the costs and
expenses (including Attorneys' Fees, advertising costs and
brokers' commissions) of recovering possession of the Leased
Property, removing persons or property therefrom, placing the
Leased Property in good order, condition, and repair, preparing
and altering the Leased Property for reletting, all other costs
and expenses of reletting, and any loss incurred by Landlord as
a result of Tenant's failure to perform Tenant's obligations
under the Purchase Agreement.
The "WORTH AT THE TIME OF AWARD" of the amounts referred to in
subparagraph 14.(b)(iii)a) and subparagraph 14.(b)(iii)b) shall
be computed by allowing interest at the Default Rate or such
other rate as may be the maximum interest rate then permitted
to be charged under California law at the time of computation.
The "WORTH AT THE TIME OF AWARD" of the amount referred to in
subparagraph 14.(b)(iii)c) shall be computed by discounting
such amount at the discount rate of the Federal Reserve Bank of
San Francisco at the time of award plus one percent (1%).
e) Such other amounts in addition to or in
lieu of the foregoing as may be permitted from time to time by
applicable California law.
(iv) The Landlord shall have the remedy described in
California Civil Code Section 1951.4 (lessor may continue lease in force
even after lessee's breach and abandonment and recover rent as it
becomes due, if lessee has right to sublet or assign, subject only to
reasonable limitations).
Accordingly, even though Tenant has breached this Lease and abandoned
the Leased Property, this Lease shall continue in effect for so long as
Landlord does not terminate Tenant's right to possession, and Landlord
may enforce all of Landlord's rights and remedies under this Lease,
including the right to recover the Rent as it becomes due under this
Lease. Tenant's right to possession shall not be deemed to have been
terminated by Landlord except pursuant to subparagraph 14.(b)(i) hereof.
The following shall not constitute a termination of Tenant's right to
possession:
a) Acts of maintenance or preservation or
efforts to relet the Leased Property;
b) The appointment of a receiver upon the
initiative of Landlord to protect Landlord's interest under
this Lease; or
c) Reasonable withholding of consent to an
assignment or subletting, or terminating a subletting or
assignment by Tenant.
(c) Enforceability. This Paragraph 14 shall be enforceable
to the maximum extent not prohibited by Applicable Law, and the unenforceability
of any provision in this Paragraph shall not render any other provision
unenforceable.
(d) Remedies Cumulative. No right or remedy herein conferred
upon or reserved to Landlord is intended to be exclusive of any other right or
remedy, and each and every right and remedy shall be cumulative and in addition
to any other right or remedy given hereunder or now or hereafter existing under
Applicable Law or in equity. In addition to other remedies provided in this
Lease, Landlord shall be entitled, to the extent permitted by Applicable Law, to
injunctive relief in case of the violation, or attempted or threatened
violation, of any of the covenants, agreements, conditions or provisions of this
Lease to be performed by Tenant, or to a decree compelling performance of any of
the other covenants, agreements, conditions or provisions of this Lease to be
performed by Tenant, or to any other remedy allowed to Landlord under Applicable
Law or in equity. Nothing contained in this Lease shall limit or prejudice the
right of Landlord to prove for and obtain in proceedings for bankruptcy or
insolvency of Tenant by reason of the termination of this Lease, an amount equal
to the maximum allowed by any statute or rule of law in effect at the time when,
and governing the proceedings in which, the damages are to be proved, whether or
not the amount be greater, equal to, or less than the amount of the loss or
damages referred to above. Without limiting the generality of the foregoing,
nothing contained herein shall modify, limit or impair any of the rights and
remedies of Landlord under the Purchase Agreement, the Pledge Agreement or the
Environmental Indemnity.
(e) Waiver by Tenant. To the extent permitted by law, Tenant
hereby waives and surrenders for itself and all claiming through Tenant under
this Lease, including creditors of all kinds, (i) any right and privilege which
it or any of them may have under any present or future constitution, statute or
rule of law to have a continuance of this Lease for the term hereby demised
after termination of Tenant's right of occupancy by order or judgment of any
court or by any legal process or writ, or under the terms of this Lease, or
after the termination of this Lease as herein provided, and (ii) the benefits of
any present or future constitution, or statute or rule of law which exempts
property from liability for debt or for distress for rent, and (iii) the
provisions of law relating to notice and/or delay in levy of execution in case
of eviction of a lessee for nonpayment of rent.
(f) No Implied Waiver. The failure of Landlord to insist at
any time upon the strict performance of any covenant or agreement or to exercise
any option, right, power or remedy contained in this Lease shall not be
construed as a waiver or a relinquishment thereof for the future. The waiver of
or redress for any violation by Tenant of any term, covenant, agreement or
condition contained in this Lease shall not prevent a
similar subsequent act from constituting a violation. Any express waiver shall
affect only the term or condition specified in such waiver and only for the time
and in the manner specifically stated therein. A receipt by Landlord of any Base
Rent or other payment hereunder with knowledge of the breach of any covenant or
agreement contained in this Lease shall not be deemed a waiver of such breach,
and no waiver by Landlord of any provision of this Lease shall be deemed to have
been made unless expressed in writing and signed by Landlord.
16. Default by Landlord. If Landlord should default in the
performance of any of its obligations under this Lease, Landlord shall have the
time reasonably required, but in no event less than thirty (30) days, to cure
such default after receipt of written notice from Tenant specifying such default
and specifying what action Tenant believes is necessary to cure the default. If
Tenant prevails in any litigation brought against Landlord because of Landlord's
failure to cure a default within the time required by the preceding sentence,
then Tenant shall be entitled to an award against Landlord for the damages
proximately caused to Tenant by such default.
17. Quiet Enjoyment. Provided Tenant pays the Base Rent and all
Additional Rent payable hereunder as and when due and payable and keeps and
fulfills all of the terms, covenants, agreements and conditions to be performed
by Tenant hereunder, Landlord shall not during the Term disturb Tenant's
peaceable and quiet enjoyment of the Leased Property; however, such enjoyment
shall be subject to the terms, provisions, covenants, agreements and conditions
of this Lease and the Permitted Encumbrances and any other claims or
encumbrances not lawfully made through or under Landlord, to which this Lease is
subject and subordinate as hereinabove set forth. Any breach by Landlord of the
foregoing covenant of quiet enjoyment shall, subject to the other provisions of
this Lease, render Landlord liable to Tenant for any monetary damages
proximately caused thereby, but as more specifically provided in Paragraph 5
above, no such breach shall entitle Tenant to terminate this Lease or excuse
Tenant from its obligation to pay Base Rent and other amounts hereunder.
18. Surrender Upon Termination. Unless Tenant or an Applicable
Purchaser purchases Landlord's entire interest in the Leased Property pursuant
to the terms of the Purchase Agreement, Tenant shall, upon the termination of
Tenant's right to occupancy, surrender to Landlord the Leased Property,
including any buildings, alterations, improvements, replacements or additions
constructed by Tenant, with all fixtures and furnishings included in the Initial
Improvements, but not including movable furniture and movable personal property
not covered by this Lease, free of all Hazardous Substances (including Permitted
Hazardous Substances) and tenancies and, to the extent required by Landlord,
with all Initial Improvements in the same condition as of the date the same were
initially completed, excepting only (i) ordinary wear and tear (provided that
the Leased Property shall have been maintained as required by the other
provisions hereof) and (ii) alterations and additions which are expressly
permitted by the terms of this Lease and which have been completed by Tenant in
a good and workmanlike manner in accordance with all Applicable Laws. Any
movable furniture or movable personal property belonging to Tenant or any party
claiming under Tenant, if not removed at the time of such termination and if
Landlord shall so elect, shall be deemed abandoned and become the property of
Landlord without any payment or offset therefor. If Landlord shall not so elect,
Landlord may remove such property from the Leased Property and store it at
Tenant's risk and expense. Tenant shall bear the expense of repairing any damage
to the Leased Property caused by such removal by Landlord or Tenant.
19. Holding Over by Tenant. Should Tenant not purchase Landlord's
right, title and interest in the Leased Property as provided in the Purchase
Agreement, but nonetheless continue to hold the Leased Property after the
termination of this Lease without Landlord's written consent, whether such
termination occurs by lapse of time or otherwise, such holding over shall
constitute and be construed as a tenancy from day to day only, at a daily Base
Rent equal to: (i) Stipulated Loss Value on the day in question, times (ii) (A)
the Prime Rate in effect for such day so long as the holdover period does not
extend beyond ninety (90) days and (B) for each such day beginning with the
ninety-first day after the holdover commences, three percent (3%) above the
Prime Rate; divided by (iii) 360; subject, however, to all of the terms,
provisions, covenants and agreements on the part of
Tenant hereunder. No payments of money by Tenant to Landlord after the
termination of this Lease shall reinstate, continue or extend the Term of this
Lease and no extension of this Lease after the termination thereof shall be
valid unless and until the same shall be reduced to writing and signed by both
Landlord and Tenant.
20. Miscellaneous.
(a) Notices. Each provision of this Lease, or of any
Applicable Laws with reference to the sending, mailing or delivery of any notice
or with reference to the making of any payment by Tenant to Landlord, shall be
deemed to be complied with when and if the following steps are taken:
(i) All Rent required to be paid by Tenant to
Landlord hereunder shall be paid to Landlord in immediately available
funds by wire transfer to:
Federal Reserve Bank of San Francisco
Account: Banque Nationale de Paris
ABA #: 121027234
Reference: KLA Instruments Lease (Phase III).
or at such other place and in such other manner as Landlord may
designate in a notice to Tenant (provided Landlord will not unreasonably
designate a method of payment other than wire transfer). Time is of the
essence as to all payments and other obligations of Tenant under this
Lease.
(ii) All Construction Advances required to be paid to
Tenant by Landlord hereunder shall be paid to Tenant in immediately
available funds by wire transfer to:
Bank of America
Account Name: KLA Instruments Corporation
Account Number: 1483100220
ABA #: 121000358
Reference: Construction Advance
or at such other place and in such other manner as Tenant may designate
in a notice to Landlord (provided Tenant will not unreasonably designate
a method of payment other than wire transfer). Time is of the essence as
to the payment of all Construction Advances required of Landlord under
this Lease.
(iii) All notices, demands and other communications to
be made hereunder to the parties hereto shall be in writing (at the
addresses set forth below) and shall be given by any of the following
means: (A) personal service, with proof of delivery or attempted
delivery retained; (B) electronic communication, whether by telex,
telegram or telecopying (if confirmed in writing sent by United States
first class mail, return receipt requested); or (C) registered or
certified first class mail, return receipt requested. Such addresses may
be changed by notice to the other parties given in the same manner as
provided above. Any notice or other communication sent pursuant to
clause (A) or (C) hereof shall be deemed received (whether or not
actually received) upon first attempted delivery at the proper notice
address on any Business Day between 9:00 A.M. and 5:00 P.M., and any
notice or other communication sent pursuant to clause (B) hereof shall
be deemed received upon dispatch by electronic means.
Address of Landlord:
BNP Leasing Corporation
717 North Harwood Street
Suite 2630
Dallas, Texas 75201
Attention: Lloyd Cox
Telecopy: (214) 969-0060
With a copy to:
Banque Nationale de Paris
180 Montgomery Street
San Francisco, California 94104
Attention: Rafael C. Lumanlan
Telecopy: (415) 296-8954
And with a copy to:
Dorothy H. Bjorck
Thompson & Knight, P.C.
1700 Pacific Avenue
Suite 3300,
Dallas, Texas 75201
Telecopy: (214) 969-1550
Address of Tenant:
KLA Instruments Corporation
160 Rio Robles
San Jose, California 95134
Attn: Christopher Stoddart, Treasurer
Telecopy: (408) 434-4268
With a copy to:
Gray Cary Ware & Freidenrich
400 Hamilton Avenue
Palo Alto, California 94301
Attn: Jonathan E. Rattner, Esq.
Telecopy: (415) 328-3029
(b) Severability. If any term or provision of this Lease or
the application thereof shall to any extent be held by a court of competent
jurisdiction to be invalid and unenforceable, the remainder of this Lease, or
the application of such term or provision other than to the extent to which it
is invalid or unenforceable, shall not be affected thereby.
(c) No Merger. There shall be no merger of this Lease or of
the leasehold estate hereby created with the fee or any other estate in the
Leased Property or any part thereof by reason of the fact that the same person
may acquire or hold, directly or indirectly, this Lease or the leasehold estate
hereby created or any interest in this Lease or in such leasehold estate as well
as the fee or any other estate in the Leased Property or any interest in such
fee or other estate, unless all Persons with an interest in the Leased Property
that would be adversely affected by any such merger specifically agree in
writing that such a merger shall occur.
(d) NO IMPLIED REPRESENTATIONS BY LANDLORD. LANDLORD AND
LANDLORD'S AGENTS HAVE MADE NO REPRESENTATIONS OR PROMISES WITH RESPECT TO THE
LEASED PROPERTY EXCEPT AS EXPRESSLY SET FORTH HEREIN, AND NO RIGHTS, EASEMENTS
OR LICENSES ARE ACQUIRED BY TENANT BY IMPLICATION OR OTHERWISE EXCEPT AS
EXPRESSLY SET FORTH IN THE PROVISIONS OF THIS LEASE, THE PURCHASE AGREEMENT AND
THE PLEDGE AGREEMENT.
(e) Entire Agreement. This Lease and the instruments
referred to herein supersede any prior negotiations and agreements between the
parties concerning the Leased Property and no amendment or modification of this
Lease shall be binding or valid unless expressed in a writing executed by both
parties hereto.
(f) Binding Effect. All of the covenants, agreements, terms
and conditions to be observed and performed by the parties hereto shall be
applicable to and binding upon their respective successors and, to the extent
assignment is permitted hereunder, their respective assigns.
(g) Time is of the Essence. Time is of the essence as to all
obligations of Tenant and all notices required of Tenant under this Lease, but
this subparagraph shall not limit Tenant's opportunity to prevent an Event of
Default by curing any breach within the cure period (if any) applicable under
subparagraph 14.(a).
(h) Governing Law. This Lease shall be governed by and
construed in accordance with the laws of the State of California.
(i) Waiver of a Jury Trial. LANDLORD AND TENANT EACH HEREBY
WAIVES ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF THIS LEASE OR ANY OTHER DOCUMENT OR DEALINGS
BETWEEN THEM RELATING TO THIS LEASE OR THE LEASED PROPERTY. The scope of this
waiver is intended to be all-encompassing of any and all disputes that may be
filed in any court and that relate to the subject matter of this transaction,
including, without limitation, contract claims, tort claims, breach of duty
claims, and all other common law and statutory claims. Tenant and Landlord each
acknowledge that this waiver is a material
inducement to enter into a business relationship, that each has already relied
on the waiver in entering into this Lease and the other documents referred to
herein, and that each will continue to rely on the waiver in their related
future dealings. Tenant and Landlord each further warrants and represents that
it has reviewed this waiver with its legal counsel, and that it knowingly and
voluntarily waives its jury trial rights following consultation with legal
counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS LEASE OR TO ANY OTHER DOCUMENTS
OR AGREEMENTS RELATING TO THIS LEASE OR THE LEASED PROPERTY. In the event of
litigation, this Lease may be filed as a written consent to a trial by the
court.
(j) Income Tax Reporting. Landlord and Tenant intend this Lease
and the Purchase Agreement to have a form for income taxes which is different
than the form of this Lease and the Purchase Agreement for other purposes, and
thus the parties acknowledge and agree as follows:
a) FOR PURPOSES OF DETERMINING THEIR RESPECTIVE
FEDERAL, STATE AND LOCAL INCOME TAX OBLIGATIONS, Landlord and Tenant
believe and intend that this Lease and the Purchase Agreement constitute
a financing arrangement or conditional sale. Both Landlord and Tenant
agree to report this Lease and the Purchase Agreement as a financing
arrangement or conditional sale on their respective income tax returns
(the "REQUIRED REPORTING"), unless such Required Reporting is challenged
in writing by the Internal Revenue Service or another governmental
authority with jurisdiction (a "TAX CHALLENGE"). Consistent with the
foregoing, Landlord and Tenant expect that Tenant (and not Landlord)
shall be treated as the true owner of the Property for income tax
purposes, thereby entitling Tenant (and not Landlord) to take
depreciation deductions and other tax benefits available to the owner.
Tenant shall also report all interest earned on Escrowed Proceeds or the
collateral covered by the Pledge Agreement as Tenant's income for
federal, state and local income tax purposes. REFERENCES IN THIS LEASE
OR IN THE PURCHASE AGREEMENT TO A "LEASE" OF THE "LEASED PROPERTY" ARE
NOT INTENDED FOR INCOME TAX PURPOSES TO REFLECT THE INTENT OF LANDLORD
OR TENANT AS TO THE FORM OF THE TRANSACTIONS COVERED BY, OR THE PROPER
CHARACTERIZATION OF, THIS LEASE AND THE PURCHASE AGREEMENT.
b) FOR ALL OTHER PURPOSES, INCLUDING THE
DETERMINATION OF THE APPROPRIATE FINANCIAL ACCOUNTING FOR THIS LEASE AND
THE DETERMINATION OF THEIR RESPECTIVE RIGHTS AND REMEDIES UNDER STATE
LAW, Landlord and Tenant believe and intend that (i) this Lease
constitutes a true Lease, not a mere financing arrangement, enforceable
in accordance with its express terms (and neither this subparagraph
20.(j) the provisions referencing this subparagraph on the title page of
this Lease and in the Purchase Agreement are intended to affect the
enforcement of any other provisions of this Lease or the Purchase
Agreement) and (ii) the Purchase Agreement shall constitute a separate
and independent contract, enforceable in accordance with the express
terms and conditions set forth therein. In this regard, Tenant
acknowledges that Tenant asked Landlord to participate in the
transactions evidenced by this Lease and the Purchase Agreement as a
landlord and owner of the Leased Property, not as a lender. Although
other transactions might have been used to accomplish similar results,
Tenant expects to receive certain material accounting and other
advantages through the use of a lease transaction. Accordingly, and
notwithstanding the Required Reporting for income tax purposes, Tenant
cannot equitably deny that this Lease and the Purchase Agreement should
be construed and enforced in accordance with their respective terms,
rather than as a mortgage or other security device, in any action
brought by Landlord to enforce this Lease or the Purchase Agreement.
In the event of a Tax Challenge, Landlord and Tenant shall each provide
to the other copies of all notices from the Internal Revenue Service or
any other governmental authority presenting the Tax Challenge. Further,
before changing from the Required Reporting because of a Tax Challenge,
Landlord and Tenant shall each consider in good faith any reasonable
suggestions received from the other party to this Lease about an
appropriate response to the Tax Challenge; provided, however, that the
suggestions are set forth in a written notice delivered no later than
thirty (30) days after the suggesting party is first notified of the Tax
Challenge; and, provided further, that when presented with a Tax
Challenge, Landlord and Tenant shall each have the right to change from
the Required Reporting rather than participate in any litigation or
other legal proceeding against the Internal Revenue Service or another
governmental authority. In any event, Tenant must indemnify and hold
harmless Landlord from and against all liabilities, costs, additional
taxes and other expenses that may arise or become due because of any
challenge to the Required Reporting or because of any resulting
recharacterization of this Lease or the Purchase Agreement required by
the Internal Revenue Service or another governmental authority,
including any additional taxes that may become due upon any sale under
the Purchase Agreement, to the extent (if any) that such liabilities,
costs, additional taxes and other expenses are not offset by tax savings
resulting from additional depreciation deductions or other tax benefits
to Landlord of the recharacterization.
IN WITNESS WHEREOF, this Lease is hereby executed in multiple originals
as of the effective date above set forth.
"Landlord"
BNP LEASING CORPORATION
By:
-----------------------------
Name: Lloyd G. Cox
Title: Vice President
"Tenant"
KLA INSTRUMENTS CORPORATION
By:
-----------------------------
Name: Christopher Stoddart
Title: Treasurer
STATE OF TEXAS )
)
COUNTY OF DALLAS )
On August 10, 1995, before me, _____________, personally appeared Lloyd
G. Cox, personally known to me (or proved to me on the basis of satisfactory
evidence) to be the person whose name is subscribed to the within instrument and
acknowledged to me that he executed the same in his authorized capacity, and
that by his signature on the instrument the person, or the entity upon behalf of
which the person acted, executed the instrument.
WITNESS my hand and official seal.
Signature ___________________________
STATE OF CALIFORNIA )
)
COUNTY OF SANTA CLARA )
On August 10, 1995, before me, ________________________, personally
appeared _________________________________, personally known to me (or proved to
me on the basis of satisfactory evidence) to be the person whose name is
subscribed to the within instrument and acknowledged to me that he executed the
same in his authorized capacity, and that by his signature on the instrument the
person, or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
Signature ___________________________
Exhibit A
PROPERTY DESCRIPTION
REAL PROPERTY in the City of San Jose, State of California, described as
follows:
Exhibit B
PERMITTED ENCUMBRANCES
This conveyance is subject to the following matters, but only to the
extent the same are still valid and in full force and effect:
Exhibit C
DESCRIPTION OF RENDERINGS OF THE INITIAL IMPROVEMENTS
Intentionally omitted.
Exhibit C-1-
Exhibit D
[KLA Instruments Lease Phase III]
ESTOPPEL FROM CONTRACTORS
_________, 199__
BNP Leasing Corporation
717 North Harwood Street
Suite 2630
Dallas, Texas 75201
Attention: Lloyd Cox
Re: Assignment of Construction Contract
Ladies and Gentlemen:
The undersigned hereby confirms, warrants and represents to BNP Leasing
Corporation, a Delaware corporation ("BNP"), and covenants with BNP as follows:
21. The undersigned has entered into that certain [Construction
Contract] (the "CONSTRUCTION CONTRACT") by and between the undersigned and KLA
Instruments Corporation ("TENANT") dated , 199__ for the construction of the
multiuse complex to be constructed on the campus leased by Tenant (the
"IMPROVEMENTS") located on the land described in Exhibit A attached hereto and
made a part hereof for all purposes (the "LAND" and, together with the
Improvements and any other improvements now on or constructed in the future on
the Land, being herein collectively referred to as the "PROJECT").
22. The undersigned has been advised that BNP owns the Land.
23. The undersigned has also received a copy of the Lease Agreement
dated as of August 10, 1995 (the "LEASE"), pursuant to which BNP is leasing the
Project to Tenant, and BNP has agreed, subject to the terms and conditions of
the Lease, to provide a construction allowance for Tenant's construction of the
Improvements. The Lease also requires Tenant to fulfill all obligations of the
["Owner"] under the Construction Contract and related documents and to indemnify
BNP against any liability arising thereunder, all as more particularly provided
in the Lease, reference to which is hereby made for all purposes.
24. A complete and correct copy of the Construction Contract is
attached to this letter. The Construction Contract is in full force and effect
and has not been modified or amended.
25. The undersigned has not sent to Tenant or received from Tenant
any notice of default or any other notice for the purpose of terminating the
Construction Contract, nor is there any existing circumstance or event which,
but for the elapse of time or otherwise, would constitute a default by the
undersigned or the ["Owner"] under the Construction Contract.
The undersigned acknowledges and agrees that:
BNP Leasing Corporation
_______________, 199___
Page 2
a) BNP shall not be held liable for, and the undersigned shall
not assert, any claims, demands or liabilities against BNP or, except for
statutory lien rights, against the Project arising under or in any way relating
to the Construction Contract; provided, this paragraph will not prohibit the
undersigned from asserting any claims or making demands under the Construction
Contract if BNP elects in writing, pursuant to Paragraph b) below, to assume the
Construction Contract in the event Tenant's right to possession of the Land is
terminated, in which event BNP shall be liable thereunder for (but only for) any
acts or omissions on the part of BNP occurring after the date on which BNP
notifies the undersigned of BNP's election to assume the Construction Contract.
b) Upon any termination of Tenant's right to possession of the
Project under the Lease, including but not limited to any eviction of Tenant
resulting from an Event of Default (as defined in the Lease), BNP may, by notice
to the undersigned and without the necessity of the execution of any other
document, assume Tenant's rights and obligations under the Construction
Contract, cure any defaults by Tenant thereunder and enforce the Construction
Contract and all rights of the ["Owner"] thereunder. Within ten (10) days of
receiving notice from BNP that Tenant's right to possession has been terminated,
the undersigned shall send to BNP a written estoppel letter stating: (i) that
the undersigned has not performed any act or executed any other instrument which
invalidates or modifies the Construction Contract in whole or in part (or, if
so, the nature of such modification); (ii) that the Construction Contract is
valid and subsisting and in full force and effect; (iii) that there are no
defaults or events of default then existing under the Construction Contract and
no event has occurred which with the passage of time or the giving of notice, or
both, would constitute such a default or event of default (or, if there is a
default, the nature of such default in detail); (iv) that the construction
contemplated by the Construction Contract is proceeding in a satisfactory manner
in all material respects (or if not, a detailed description of all significant
problems with the progress of construction); (v) a reasonably detailed report of
the then critical dates projected by the undersigned for work and deliveries
required to complete the construction project; (vi) the total amount paid for
construction through the date of the letter; (vii) the estimated total cost of
completing such construction as of the date of the letter, together with a
current draw schedule; and (viii) any other information BNP may request to allow
it to decide whether to assume the Construction Contract. BNP shall have thirty
(30) days from receipt of such written certificate containing all such requested
information to decide whether to assume the Construction Contract. If BNP fails
to assume the Construction Contract within such time, the undersigned agrees
that BNP shall not be liable for (and the undersigned shall not assert or bring
any action against BNP or, except for statutory lien rights not waived, against
the Land or improvements thereon for) any damages or other amounts resulting
from the breach or termination of the Construction Contract or under any other
theory of liability of any kind or nature, but rather the undersigned shall look
solely to Tenant and any statutory lien rights not waived for the recovery of
any such damages or other amounts.
c) If BNP notifies the undersigned that BNP shall not assume
the Construction Contract pursuant to the preceding paragraph following the
termination of Tenant's right to possession of the Project under the Lease, the
undersigned shall immediately discontinue the work under the Construction
Contract and remove its personnel from the Project, and BNP shall be entitled to
take exclusive possession of the Project and all or any part of the equipment
and materials delivered or en route to the Project. The undersigned shall also,
upon request by BNP, deliver and assign to BNP all plans and specifications and
other contract documents previously delivered to the undersigned (except that
the undersigned may keep an original set of the Construction Contract and other
contract documents executed by Tenant), all other material relating to the work
which belongs to BNP or Tenant, and all papers and documents relating to
governmental permits, orders placed, bills and invoices, lien releases and
financial management under the Construction Contract. Notwithstanding the
undersigned's receipt of any notice from BNP that BNP declines to assume the
Construction Contract, the undersigned shall for a period not to exceed fifteen
(15) days after receipt of such notice
Exhibit D-2-
BNP Leasing Corporation
_______________, 199___
Page 3
take such steps, at BNP's expense, as are reasonably necessary to preserve and
protect work completed and in progress and to protect materials, equipment and
supplies at the site or in transit.
d) No action taken by BNP or the undersigned with respect to
the Construction Contract shall prejudice any other rights or remedies of BNP or
the undersigned provided by law, by the Lease, by the Construction Contract or
otherwise against Tenant.
e) The undersigned agrees promptly to notify BNP of any
material default or claimed material default by Tenant under the Construction
Contract, describing with particularity the default and the action the
undersigned believes is necessary to cure the same. The undersigned will send
any such notice to BNP prominently marked "URGENT - NOTICE OF TENANT'S DEFAULT
UNDER CONSTRUCTION AGREEMENT WITH KLA INSTRUMENTS CORPORATION - SAN JOSE
CALIFORNIA" at the address specified for notice below (or at such other
addresses as BNP shall designate in notice sent to the undersigned), by
certified or registered mail, return receipt requested. Following receipt of
such notice, the undersigned will permit BNP or its designee to cure any such
default within the time period reasonably required for such cure, but in no
event less than thirty (30) days. If it is necessary or helpful to take
possession of all or any portion of the Project to cure a default by Tenant
under the Construction Contract, the time permitted by the undersigned for cure
by BNP will include the time necessary to terminate Tenant's right to possession
of the Project and evict Tenant, provided that BNP commences the steps required
to exercise such right within sixty (60) days after it is entitled to do so
under the terms of the Lease and applicable law. If the undersigned incurs
additional costs due to the extension of the aforementioned cure period, the
undersigned shall be entitled to an equitable adjustment to the price of the
Construction Contract for such additional costs.
f) Any notice or communication required or permitted hereunder
shall be given in writing, sent by (a) personal delivery or (b) expedited
delivery service with proof of delivery or (c) United States mail, postage
prepaid, registered or certified mail or (d) telegram, telex or telecopy,
addressed as follows:
To the undersigned: _______________________________
______________________________
______________________________
To BNP: BNP Leasing Corporation
717 North Harwood Street
Suite 2630
Dallas, Texas 75201
g) The undersigned acknowledges that it has all requisite
authority to execute this letter. The undersigned further acknowledges that BNP
has requested this letter, and is relying on the truth and accuracy of the
representations made herein, in connection with BNP's decision to advance funds
for construction under the Lease with Tenant.
Very truly yours,
_____________________________
Exhibit D-3-
BNP Leasing Corporation
_______________, 199___
Page 4
By:__________________________
Name:_____________________
Title:____________________
Tenant joins in the execution of this letter solely for the purpose of
evidencing its consent hereto, including its consent to the provisions that
would allow, but not require, BNP to assume the Construction Contract in the
event Tenant is evicted from the Project.
KLA Instruments Corporation
By:__________________________
Name:_____________________
Title:____________________
Exhibit D-4-
Exhibit E
ESTOPPEL FROM ARCHITECTS/ENGINEERS
KLA INSTRUMENTS LEASE (PHASE III)
_________, 199__
BNP Leasing Corporation
717 North Harwood Street
Suite 2630
Dallas, Texas 75201
Attention: Lloyd Cox
Re: Assignment of [Architect's/Engineer's Agreement]
Ladies and Gentlemen:
The undersigned hereby confirms, warrants and represents to BNP Leasing
Corporation, a Delaware corporation ("BNP"), and covenants with BNP as follows:
26. The undersigned has entered into that certain
[Architects/Engineers Agreement] (the "AGREEMENT") by and between the
undersigned and KLA Instruments Corporation ("TENANT") dated _________, 199__
for the [design] of the multiuse complex to be constructed on the San Jose
campus leased by Tenant (the "IMPROVEMENTS") located on the land described in
Exhibit A attached hereto and made a part hereof for all purposes (the "LAND"
and, together with the Improvements and any other improvements now on or
constructed in the future on the Land, being herein collectively referred to as
the "PROJECT").
27. The undersigned has been advised that BNP owns the Land.
28. The undersigned has also received a copy of the Lease Agreement
dated as of August 10, 1995 (the "LEASE"), pursuant to which BNP is leasing the
Project to Tenant, and BNP has agreed, subject to the terms and conditions of
the Lease, to provide a construction allowance for Tenant's construction of the
Improvements. The Lease also requires Tenant to fulfill all obligations of the
["Owner"] under the Agreement and related documents and to indemnify BNP against
any liability arising thereunder, all as more particularly provided in the
Lease, reference to which is hereby made for all purposes.
29. A complete and correct copy of the Agreement is attached to
this letter. The Agreement is in full force and effect and has not been modified
or amended.
30. The undersigned has not sent to Tenant or received from Tenant
any notice of default or any other notice for the purpose of terminating the
Agreement, nor is there any existing circumstance or event which, but for the
elapse of time or otherwise, would constitute a default by the undersigned or
the ["Owner"] under the Agreement.
1.
The undersigned acknowledges and agrees that:
BNP Leasing Corporation
______________, 199____
Page 2
a) BNP shall not be held liable for, and the undersigned
shall not assert, any claims, demands or liabilities against BNP or, except for
any statutory lien rights, against the Project arising under or in any way
relating to the Agreement; provided, this paragraph will not prohibit the
undersigned from asserting any claims or making demands under the Agreement if
BNP elects in writing, pursuant to Paragraph b) below, to assume the Agreement
in the event Tenant's right to possession of the Land is terminated, in which
event BNP shall be liable thereunder for (but only for) any acts or omissions on
the part of BNP occurring after the date on which BNP notifies the undersigned
of BNP's election to assume the Agreement.
b) Upon any termination of Tenant's right to possession of
the Project under the Lease, including but not limited to any eviction of Tenant
resulting from an Event of Default (as defined in the Lease), BNP may, by notice
to the undersigned and without the necessity of the execution of any other
document, assume Tenant's rights and obligations under the Agreement, cure any
defaults by Tenant thereunder and enforce the Agreement and all rights of the
["Owner"] thereunder. Within ten (10) days of receiving notice from BNP that
Tenant's right to possession has been terminated, the undersigned shall send to
BNP a written estoppel letter stating: (i) that the undersigned has not
performed any act or executed any other instrument which invalidates or modifies
the Agreement in whole or in part (or, if so, the nature of such modification);
(ii) that the Agreement is valid and subsisting and in full force and effect;
(iii) that there are no defaults or events of default then existing under the
Agreement and no event has occurred which with the passage of time or the giving
of notice, or both, would constitute such a default or event of default (or, if
there is a default, the nature of such default in detail); (iv) that the
construction contemplated by the Agreement is proceeding in a satisfactory
manner in all material respects (or if not, a detailed description of all
significant problems with the progress of construction); (v) a reasonably
detailed report of the then critical dates projected by the undersigned for work
and deliveries required to complete the Project; (vi) the total amount paid and
due for services rendered under the Agreement through the date of the letter;
(vii) the estimated total cost of completing services contemplated by the
Agreement after the date of the letter, together with a projected payment
schedule; and (viii) any other information BNP may request to allow it to decide
whether to assume the Agreement. BNP shall have thirty (30) days from receipt of
such written certificate containing all such requested information to decide
whether to assume the Agreement. If BNP fails to assume the Agreement within
such time, the undersigned agrees that BNP shall not be liable for (and the
undersigned shall not assert or bring any action against BNP or, except for any
statutory lien rights not waived, against the Land or improvements thereon for)
any damages or other amounts resulting from the breach or termination of the
Agreement or under any other theory of liability of any kind or nature, but
rather the undersigned shall look solely to Tenant and any statutory lien rights
not waived for the recovery of any such damages or other amounts.
c) If BNP notifies the undersigned that BNP shall not
assume the Agreement pursuant to the preceding paragraph following the
termination of Tenant's right to possession of the Project under the Lease, the
undersigned shall immediately discontinue the work under the Agreement and
remove its personnel from the Project, and BNP shall be entitled to obtain and
use plans and specifications prepared under the Agreement with respect to the
Project. The undersigned shall also, upon request by BNP, deliver to BNP all
such plans and specifications, all other contract documents previously delivered
to the undersigned (except that the undersigned may keep an original set of the
Agreement and other contract documents executed by Tenant), all other material
relating to the work which belongs to BNP or Tenant, and all papers and
documents relating to governmental permits, orders placed, bills and invoices,
lien releases and financial management under the Agreement.
d) No action taken by BNP or the undersigned with respect
to the Agreement shall prejudice any other rights or remedies of BNP or the
undersigned provided by law, by the Lease, by the Agreement or otherwise against
Tenant.
Exhibit E-2-
BNP Leasing Corporation
______________, 199____
Page 3
e) The undersigned agrees promptly to notify BNP of any
material default or claimed material default by Tenant under the Agreement,
describing with particularity the default and the action the undersigned
believes is necessary to cure the same. The undersigned will send any such
notice to BNP prominently marked "URGENT NOTICE OF TENANT'S DEFAULT UNDER
AGREEMENT WITH KLA INSTRUMENTS CORPORATION - SAN JOSE CALIFORNIA" at the address
specified for notice below (or at such other addresses as BNP shall designate in
notice sent to the undersigned), by certified or registered mail, return receipt
requested. Following receipt of such notice, the undersigned will permit BNP or
its designee to cure any such default within the time period reasonably required
for such cure, but in no event less than thirty (30) days. If it is necessary or
helpful to take possession of all or any portion of the Project to cure a
default by Tenant under the Agreement, the time permitted by the undersigned for
cure by BNP will include the time necessary to terminate Tenant's right to
possession of the Project and evict Tenant, provided that BNP commences the
steps required to exercise such right within sixty (60) days after it is
entitled to do so under the terms of the Lease and applicable law.
f) Any notice or communication required or permitted
hereunder shall be given in writing, sent by (a) personal delivery or (b)
expedited delivery service with proof of delivery or (c) United States mail,
postage prepaid, registered or certified mail or (d) telegram, telex or
telecopy, addressed as follows:
To the undersigned: _____________________________________
_________________________
_________________________
To BNP: BNP Leasing Corporation
717 North Harwood Street
Suite 2630
Dallas, Texas 75201
g) The undersigned acknowledges that it has all requisite
authority to execute this letter. The undersigned further acknowledges that BNP
has requested this letter, and is relying on the truth and accuracy of the
representations made herein, in connection with BNP's decision to advance funds
for construction under the Lease with Tenant.
Very truly yours,
___________________________
By:________________________
Name:___________________
Title:__________________
Exhibit E-3-
BNP Leasing Corporation
______________, 199____
Page 4
Tenant joins in the execution of this letter solely for the purpose of
evidencing its consent hereto, including its consent to the provisions that
would allow, but not require, BNP to assume the Agreement in the event Tenant is
evicted from the Project.
KLA Instruments Corporation
By:_________________________
Name:____________________
Title:___________________
Exhibit E-4-
Exhibit F
Draw Request Forms
KLA Instruments Lease (Phase III)
________, 199__
BNP Leasing Corporation
c/o Banque Nationale de Paris
180 Montgomery Street
San Francisco, California 94104
Attention: Rafael C. Lumanlan
Re: Construction Advance Request No. __________
by KLA Instruments Corporation
Ladies and Gentlemen:
Reference is made to the Lease Agreement between BNP Leasing
Corporation, as landlord (herein "LANDLORD"), and KLA Instruments Corporation,
as tenant (herein "TENANT"), dated as of August 10, 1995 (herein "THE LEASE").
Capitalized terms defined in the Lease and used but not defined in this letter
are intended to have the meanings assigned to them in the Lease.
Tenant hereby makes request for a Construction Advance in the amount of
$________________ (herein the "CURRENT ADVANCE"). Included herewith are:
1. An Application and Certificate for Payment based on AIA
Form G702 (herein the "CONTRACTOR'S APPLICATION") from Tenant's
general contractor, attached to which is a schedule of values
listing all subcontractors, suppliers and other parties to whom
the general contractor has or will make payments from the draw
requested in the Contractor's Application. The Contractor's
Application evidences an obligation incurred by (and previously
paid by) Tenant for construction of Improvements and for which
Tenant is entitled to reimbursement from the Current Advance.
2. A list of any costs paid by Tenant, other than to the general
contractor, for which Tenant is entitled to reimbursement from
the proceeds of the Current Advance (herein the "OTHER COSTS
LIST").
3. Invoices and requests for payments from the subcontractors and
others entitled to payment from the general contractor for
construction and related work covered by the Contractor's
Application; excluding, however, invoices or requests from some
or all subcontractors and others that, according to
Exhibit F-1-
BNP Leasing Corporation
______________, 199____
Page 2
the Contractor's Application, are to be paid less than $300,000
from the draw requested in Contractor's Application. Such
invoices and requests for payments are consistent with the
detail shown in the schedule of values attached to the
Contractor's Application.
4. Invoices or other evidence of the costs (if any) included in
the Other Costs List.
5. A list of any "checks on hold" (i.e., payments withheld from
subcontractors or suppliers by Tenant's general contractor
because of some defect or deficiency in the payee's request for
payment or in the work or materials provided by the payee) in
excess of $50,000.
6. An up-to-date list of the names and addresses of any
subcontractors that have actually filed a claim of lien against
the Leased Property, together with, to the extent not already
provided with a prior request for a Construction Advance, a
copy of the claim of lien filed.
7. A certification of an officer of Tenant as required by
Paragraph 6.(d)(viii) of the Lease.
We hereby confirm that Landlord will not be responsible for the
application of any funds advanced to Tenant or to any other party at our
request.
Sincerely,
KLA Instruments Corporation
By:________________________________
Name:___________________________
Title:__________________________
cc: BNP Leasing Corporation
717 North Harwood Street
Suite 2630
Dallas, Texas 75201
Attention: Lloyd Cox
Dorothy H. Bjorck
Thompson & Knight,
a Professional Corporation
1700 Pacific Avenue, Suite 3300
Dallas, Texas 75201
Exhibit F-2-
CONSTRUCTION ADVANCE CERTIFICATE
KLA INSTRUMENTS LEASE (PHASE III)
Pursuant to Paragraph 6.(d)(viii) of the Lease Agreement dated as of August 10,
1995 (the "LEASE") between KLA Instruments Corporation ("TENANT") and BNP
Leasing Corporation ("LANDLORD"), Tenant does hereby represent, warrant and
certify to Landlord in connection with Tenant's request for Construction Advance
No. __________ that:
a) no Event of Default has occurred and is continuing,
b) the representations and warranties of Tenant contained
in the Lease are true and correct in all material respects on and as of the date
hereof as though made on and as of the date hereof, subject only to the
following exceptions:
[LIST EXCEPTIONS HERE, OR IF THERE ARE NO EXCEPTIONS, INSERT "NONE"]
c) Construction of the Initial Improvements has commenced
and is progressing without any significant continuing interruption in a good and
workmanlike manner and substantially in accordance with the requirements of the
Lease and all Applicable Laws and Tenant has corrected or is diligently pursuing
the correction of any significant defect in such construction,
d) all costs and expenses for which Tenant is requesting
reimbursement by the Construction Advance referenced above constitute actual
costs and expenses incurred by Tenant for the Initial Improvements or for
property taxes or assessments assessed against and paid with respect to the
Leased Property, and
e) The amounts designated for payment to Potential Lien
Claimants in prior Construction advance Requests have been paid to such
Potential Lien Claimants, and the advance being requested hereby will not result
in an excess of $2,000,000 or more of (1) the total cost of work with respect to
which Potential Lien Claimants could have asserted a lien against the Leased
Property and for which Construction Advances have been advanced by Landlord,
over (2) the cost of such work for which Tenant has provided to Landlord
unconditional statutory lien releases from all Potential Lien Claimants.
Capitalized terms used herein which are defined in the Lease but not in this
Certificate shall have the meanings assigned to them in the Lease.
In witness whereof, this Certificate is executed by an officer of KLA
Instruments Corporation as of ______________, 19___.
KLA Instruments Corporation
By:________________________________
Name:___________________________
Title:__________________________
Exhibit F-3-
LIST OF LIENS FOR WHICH A CLAIM OF LIEN HAS ACTUALLY BEEN FILED
(Construction Advance Request No. ________)
KLA Instruments Lease (Phase III)
Liens for which a claim of lien has actually been filed are as follows:
1.
2.
3.
Exhibit F-4-
OTHER COSTS LIST
(Construction Advance Request No. ________)
KLA Instruments Lease (Phase III)
Costs paid-other than to Tenant's general contractor-by Tenant and for which
Tenant is entitled to reimbursement from the Current Advance being requested are
as follows:
1.
2.
3.
Exhibit F-5-
Exhibit G
FINANCIAL COVENANT COMPLIANCE CERTIFICATE
BNP Leasing Corporation
c/o Banque Nationale de Paris, San Francisco
180 Montgomery Street
San Francisco, California 94104
Attention: Rafael C. Lumanlan
Re: KLA LEASE AGREEMENT (PHASE III)
Gentlemen:
I, the undersigned, the [chief financial officer, controller, treasurer
or the assistant treasurer] of KLA Instruments Corporation, do hereby certify,
represent and warrant that:
1. This Certificate is furnished pursuant to subparagraph 9.(w)
(iii) of that certain Lease Agreement dated as of August 10, 1995 (the "LEASE
AGREEMENT," the terms defined therein being used herein as therein defined)
between KLA Instruments Corporation (the "TENANT"), and you.
2. Annex 1 attached hereto sets forth financial data and
computations evidencing the Tenant's compliance with certain covenants of the
Revolving Credit Agreement attached to the Lease Agreement, all of which data
and computations are complete, true and correct.
3. To the knowledge of Tenant no Default or Event of Default under
the Lease Agreement has occurred and is continuing.
4. The representations of Tenant set forth in the Lease Agreement
are true and correct in all material respects as of the date hereof as though
made on and as of the date hereof.
Executed this _____ day of ______________, 19___.
KLA Instruments Corporation
Name:_________________________
Title:________________________
[cc all Participants]
Exhibit G-1-
Annex 1 To Compliance Certificate
For the _________________ Ended ________________, 19___
[INSERT HERE COMPUTATIONS SHOWING COMPLIANCE WITH FINANCIAL COVENANTS]
Exhibit G-2-
Exhibit H
PERMITTED HAZARDOUS SUBSTANCES
KLA INSTRUMENTS LEASE (PHASE III)
(NOT a Comprehensive List)
It is anticipated that the following Hazardous Substances, and others necessary
for the use, occupancy, and operation of the Leased Property in accordance with
the terms and conditions of this Lease, will be used by Tenant at the Leased
Property:
Description_____________________________________C.A.S.#
Exhibit H-1-
Exhibit I
RESOLUTION OF DISPUTED INSURANCE CLAIMS
KLA INSTRUMENTS LEASE (PHASE III)
If Landlord and Tenant cannot agree upon the amount for which any
insurance claim against an insurer should be settled after damage to the Leased
Property by fire or other casualty, and so long as neither Tenant nor Landlord
is authorized to determine such amount without the consent of the other pursuant
to subparagraph 9.(r), then either party may require that the amount be
determined as follows:
(i) Landlord and Tenant shall each appoint an experienced
architect who is familiar with construction costs for comparable
properties in the vicinity of the Leased Property. Each party will make
the appointment no later than 10 days after receipt of notice from the
other party that the dispute resolution process described in this
Exhibit has been invoked. The agreement of the two architects as to the
appropriate amount of the insurance settlement will be binding upon
Landlord and Tenant. If the two architects cannot agree upon the
settlement amount within 30 days following their appointment, they shall
within another 10 days agree upon a third architect. Immediately
thereafter, each of the first two architects will submit his best
estimate of the appropriate settlement amount (together with a written
report supporting such estimate) to the third architect and the third
architect will choose between the two estimates. The estimate chosen by
the third architect as the closest to the amount needed to repair and
restore the Leased Property will be binding upon Landlord and Tenant as
the amount for which the applicable insurance claim should be settled.
(However, no such estimate and nothing contained in this Exhibit will
limit Tenant's liability under other provisions of this Lease for the
repair and restoration of the Leased Property.) Notification in writing
of the estimate chosen by the third architect shall be made to Landlord
and Tenant within 15 days following the selection of the third
architect.
(ii) If architects must be selected under the procedure set
out above and either Tenant or Landlord fails to appoint an architect or
fails to notify the other party of such appointment within 10 days after
receipt of notice that the prescribed time for appointing the architects
has passed, then the other party's architect will determine the
appropriate settlement amount. All architects selected for the dispute
resolution process set out in this Exhibit will be disinterested,
reputable, qualified architects with at least 15 years experience
designing and overseeing the construction of properties comparable to
the Leased Property.
(iii) If a third architect must be chosen under the procedure
set out above, he will be chosen on the basis of objectivity and
competence, not on the basis of his relationship with the other
architects or the parties to this Lease, and the first two architects
will be so advised. Although the first two architects will be instructed
to attempt in good faith to agree upon the third architect, if for any
reason they cannot agree within the prescribed time, either Landlord or
Tenant may require the first two architects to immediately submit its
top choice for the third architect to the then highest ranking officer
of the San Francisco Bar Association who will agree to help and who has
no attorney/client or other significant relationship to either Landlord
or Tenant. Such officer will have complete discretion to select the most
objective and competent third architect from between the choice of each
of the first two architects, and will do so within 20 days after such
choices are submitted to him.
(iv) Either Landlord or Tenant may notify the architect
selected by the other party to demand the submission of an estimate of
the appropriate settlement amount or a choice of a third architect as
required under the procedure described above; and if the submission of
such an estimate or choice is required but the
Exhibit I-1-
other party's architect fails to comply with the demand within 5 days
after receipt of such notice, then the settlement amount or choice of
the third architect, as the case may be, selected by the other architect
(i.e., the notifying party's architect) will be binding upon Landlord
and Tenant.
(v) For the purposes of this Exhibit, "appropriate
settlement amount" and words of like effect means the amount required to
restore the Leased Property, less any insurance deductible that clearly
applies under the policy of insurance which provides the coverage to be
settled; and all architects and other persons involved in the
determination of the settlement amount will be so advised.
Exhibit I-2-
Exhibit J
NOTICE OF LIBOR PERIOD ELECTION
KLA INSTRUMENTS LEASE (PHASE III)
BNP Leasing Corporation
c/o Banque Nationale de Paris, San Francisco
180 Montgomery Street
San Francisco, California 94104
Attention: Rafael C. Lumanlan
Re: Lease Agreement dated August 10, 1995, between KLA Instruments
Corporation, as tenant, and BNP Leasing Corporation, as landlord
Gentlemen:
Capitalized terms used in this letter are intended to have the meanings
assigned to them in the Lease referenced above. This letter constitutes notice
to you that the LIBOR Period Election under the Lease shall be:
________________ month(s),
beginning with the first Base Rent Period that commences on or after:
______________, 199__.
NOTE: YOU SHALL BE ENTITLED TO DISREGARD THIS NOTICE IF THE NUMBER OF MONTHS
SPECIFIED ABOVE IS NOT A PERMITTED NUMBER UNDER THE DEFINITION OF "LIBOR PERIOD
ELECTION" SET FORTH AS PARAGRAPH 1.(bg) OF THE LEASE, OR IF THE DATE SPECIFIED
ABOVE CONCERNING THE COMMENCEMENT OF THE LIBOR PERIOD ELECTION IS LESS THAN TEN
(10) BUSINESS DAYS AFTER YOUR RECEIPT OF THIS NOTICE. HOWEVER, WE ASK THAT YOU
NOTIFY US IMMEDIATELY IF FOR ANY REASON YOU BELIEVE THIS NOTICE IS DEFECTIVE.
Executed this _____ day of ______________, 19___.
KLA Instruments Corporation
Name:_________________________
Title:________________________
[cc all Participants]
EXECUTION
PURCHASE AGREEMENT
This PURCHASE AGREEMENT (this "AGREEMENT") is made as of August 10,
1995, by KLA INSTRUMENTS CORPORATION, a Delaware corporation ("KLA"), and BNP
LEASING CORPORATION, a Delaware corporation ("BNP").
R E C I T A L S
A. BNP is acquiring the land described in Part I of Exhibit A
attached hereto and any improvements and fixtures located thereon, and BNP
anticipates that it will obtain the land described in Part II of Exhibit A.
Pursuant to a Lease Agreement (as from time to time supplemented, amended or
restated, the "LEASE") dated as of the date hereof between KLA and BNP, the land
described in Part I of Exhibit A is being leased by BNP to KLA, and the Lease
provides that the land described in Part II of Exhibit A will be leased by BNP
to KLA effective as of the date BNP acquires such land.
B. BNP is also concurrently herewith receiving a separate
environmental indemnity from KLA pursuant to an Environmental Indemnity
Agreement (as from time to time supplemented, amended or restated, the
"ENVIRONMENTAL INDEMNITY") between KLA and BNP dated as of the date hereof.
C. As a condition to BNP's acquisition of any of the land
described in Exhibit A, BNP requires the agreements of KLA, on and subject to
the terms and conditions set out herein, to protect BNP against certain losses
that BNP may suffer if (1) the value of the land covered from time to time under
the Lease is or becomes less than BNP's investment in such land, or (2) the
value of buildings and other property covered by the Lease, exclusive of land,
is or may become less than BNP's investment in such buildings and other
property.
NOW, THEREFORE, in consideration of the above recitals and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. Definitions. As used herein, the terms "KLA", "BNP", "Lease,"
and "Environmental Indemnity" shall have the meanings indicated above; terms
with initial capitals defined in the Lease and used but not defined herein shall
have the meanings assigned to them in the Lease; and the terms listed
immediately below shall have the following meanings:
(a) Applicable Purchaser. "Applicable Purchaser" means any third
party designated by KLA to purchase the interest of BNP in the Property as
provided in Paragraph 2(a)(2) below; provided, the third party so designated
must not be a Person prohibited by ERISA from purchasing BNP's interest.
(b) Designated Payment Date. "Designated Payment Date" means the
earlier of:
(1) the effective date of any termination of the Lease by KLA
pursuant to Paragraph 2 thereof;
(2) any Advance Date or Base Rent Date designated by KLA in a
written notice given by KLA to BNP, provided the notice of the date so
designated is given by KLA at least thirty (30) days before the date so
designated; or
(3) any date designated by BNP in a written notice given by
BNP to KLA when an Event of Default by KLA is continuing, provided the
notice of the date so designated is given by BNP at least thirty (30)
days before the date so designated; or
(4) August 1, 2000, or if August 1, 2000 is not a Business
Day, then the next following Business Day.
(c) Fair Market Value. "Fair Market Value" means with respect to
any property or interest therein, the fair market value of such property or
interest on or about the Designated Payment Date (calculated under the
assumptions, whether or not then accurate, that KLA has maintained the Property
in compliance with all Applicable Laws [including Environmental Laws]; that KLA
has completed all construction which was commenced prior to the Designated
Payment Date; that KLA has repaired and restored the Property after any damage
following fire or other casualty; that KLA has restored the remainder of the
Property after any partial taking by eminent domain; that KLA has completed any
contests of and paid any taxes due [other than Excluded Taxes] or other amounts
secured by or allegedly secured by a lien against the Property other than
Prohibited Encumbrances; that KLA has complied with all Permitted Encumbrances
and cured any title defects affecting the Property other than Prohibited
Encumbrances, all in accordance with the standards and requirements of the Lease
as though the Lease were continuing in force) as determined by an independent
MAI appraiser selected by BNP, which appraiser must have five (5) years or more
experience appraising similar properties in northern California.
(d) Improvement Value Percentage. "Improvement Value Percentage"
means the percentage computed by dividing the value of the Improvements and any
other Property, exclusive of the land, by the value of the entire Property,
including land. BNP and KLA stipulate that the Improvement Value Percentage is
65.58% and will remain so unless it is adjusted by BNP prior to the Designated
Payment Date. Following any change in circumstances that could affect the
allocation of the value of the Property between land and other parts of the
Property (including, without limitation, any casualty or condemnation or
conveyance in lieu of condemnation and any construction or demolition of
improvements not presently anticipated), BNP may determine that an adjustment to
the Improvement Value Percentage is necessary or appropriate, in which event BNP
may make the adjustment it deems necessary or appropriate by notice given to KLA
at any time prior to the Designated Payment Date. Any such determination by BNP
shall be conclusive and binding for purposes of this Agreement, absent clear and
demonstrable error.
(e) Land Value Percentage. "Land Value Percentage" means 100%
less the Improvement Value Percentage. Absent an adjustment of the Improvement
Value Percentage as provided in the definition thereof above, the Land Value
Percentage shall equal 34.42%.
(f) Property. "Property" means the land and easements described
in Exhibit A and any and all other real or personal property from time to time
covered by the Lease and included within the "Leased Property" as defined
therein, together with BNP's interest in any funds held as Escrowed Proceeds
from time to time; provided, however, as used herein "Property" will not include
the land described in Part II of Exhibit A or any improvements thereof or
easements appurtenant thereto or any
-2-
Personal Property (as defined in the Lease) related to such land, unless and
until BNP acquires such land and thereby causes it to be effectively added to
the Leased Property.
(g) Purchase Price. "Purchase Price" means an amount equal to
Stipulated Loss Value outstanding on the Designated Payment Date, plus all costs
and expenses (including appraisal costs, withholding taxes (if any) and
reasonable Attorneys' Fees, as defined in the Lease) incurred in connection with
any sale of the Property by BNP hereunder or in connection with collecting sales
proceeds due hereunder.
(h) Prohibited Encumbrance. "Prohibited Encumbrance" means any
lien or other title defect encumbering the Property that is claimed by BNP
itself or lawfully claimed by a third party through or under BNP, including any
judgment lien lawfully filed against BNP and including any tax lien assessed
because of BNP's failure to pay Excluded Taxes, but excluding the Lease and any
lien or other title defect that (i) is a Permitted Encumbrance (as defined in
the Lease), regardless of whether claimed by, through or under BNP, (ii) is
claimed by, through or under KLA or any Participant approved by KLA, or (iii)
exists because of any breach by KLA of the Lease, because of anything done or
not done by BNP in an effort to satisfy subparagraph 10(b) of the Lease, or
because of anything done or not done by BNP at the request of KLA.
(i) Net Improvement Sales Proceeds. "Net Improvement Sales
Proceeds" means the Improvement Value Percentage, times the net cash price that
BNP actually receives from any Applicable Purchaser upon the Designated Payment
Date because of BNP's sale of its interest in the Property to such Applicable
Purchaser or that BNP would have received from an Applicable Purchaser on the
Designated Payment Date but for BNP's election to retain the Property as
provided in Paragraph 2(a)(2) below.
(j) Net Land Sales Proceeds. "Net Land Sales Proceeds" means the
Land Value Percentage, times the net cash price that BNP actually receives from
any Applicable Purchaser upon the Designated Payment Date because of BNP's sale
of its interest in the Property to such Applicable Purchaser or that BNP would
have received from an Applicable Purchaser on the Designated Payment Date but
for BNP's election to retain the Property as provided in Paragraph 2(a)(2)
below.
(k) Remarketing Notice. "Remarketing Notice" shall have the
meaning assigned to it in Paragraph 2(b)(1) below.
(l) Required Documents. "Required Documents" means the grant
deed and other documents that BNP must tender pursuant to Paragraph 3 below.
(m) Shortage Amount. "Shortage Amount" shall mean the sum of any
Supplemental Land Payment and any Supplemental Improvement Payment that may
become due pursuant to Paragraph 2(a)(2) below.
-3-
(n) Stipulated Loss Value of the Improvements. "Stipulated Loss
Value of the Improvements" means the Improvement Value Percentage, times the
Stipulated Loss Value outstanding on the Designated Payment Date prior to any
sale hereunder.
(o) Stipulated Loss Value of the Land. "Stipulated Loss Value of
the Land" means the Land Value Percentage, times the Stipulated Loss Value
outstanding on the Designated Payment Date prior to any sale hereunder.
(p) Supplemental Improvement Payment. "Supplemental Improvement
Payment" means a payment from KLA to BNP equal to the amount, if any, by which
the Stipulated Loss Value of the Improvements exceeds Net Improvement Sales
Proceeds. HOWEVER, IF (BUT ONLY IF) NO EVENT OF DEFAULT HAS OCCURRED AND IS
CONTINUING UNDER THE LEASE AND NEITHER KLA NOR ANY APPLICABLE PURCHASER HAS
FAILED TO PAY ANY AMOUNT REQUIRED TO BE PAID BY THIS AGREEMENT ON THE DATE SUCH
AMOUNT FIRST BECAME DUE, THEN ANY SUPPLEMENTAL IMPROVEMENT PAYMENT REQUIRED BY
THIS AGREEMENT SHALL NOT EXCEED EIGHTY-FIVE PERCENT (85%) OF THE STIPULATED LOSS
VALUE OF THE IMPROVEMENTS.
(q) Supplemental Land Payment. "Supplemental Land Payment" means
a payment from KLA to BNP equal to the amount, if any, by which the Stipulated
Loss Value of the Land exceeds Net Land Sale Proceeds. HOWEVER, IF (BUT ONLY IF)
NO EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING UNDER THE LEASE AND NEITHER
KLA NOR ANY APPLICABLE PURCHASER HAS FAILED TO PAY ANY AMOUNT REQUIRED TO BE
PAID BY THIS AGREEMENT ON THE DATE SUCH AMOUNT FIRST BECAME DUE, THEN ANY
SUPPLEMENTAL LAND PAYMENT REQUIRED BY THIS AGREEMENT SHALL NOT EXCEED
EIGHTY-FIVE PERCENT (85%) OF THE STIPULATED LOSS VALUE OF THE LAND.
2. KLA's Options and Obligations on the Designated Payment Date.
(a) Choices. On the Designated Payment Date KLA shall have the
right and the obligation to either:
(1) purchase BNP's interest in the Property for a net cash
price equal to the Purchase Price; or
(2) pay to BNP the Supplemental Improvement Payment (if any)
and the Supplemental Land Payment (if any) and cause the Applicable
Purchaser to purchase BNP's interest in the Property for a net cash
price not less than the lesser of (a) the Fair Market Value of the
Property or (b) Stipulated Loss Value outstanding immediately prior to
the purchase. If, however, the Fair Market Value is less than fifteen
percent (15%) of Stipulated Loss Value, BNP may elect to keep the
Property rather than sell to the Applicable Purchaser, and no such
election by BNP will relieve KLA of its obligation to pay the
Supplemental Improvement Payment and the Supplemental Land Payment. Any
Supplemental Improvement Payment will compensate BNP for, or mitigate
against, any loss BNP may suffer relating to BNP's interest in
Improvements; and any Supplemental Land Payment will compensate BNP
for, or mitigate against, any loss BNP may suffer relating to BNP's
interest in the Land only. In any event, if the net cash price actually
paid by the Applicable Purchaser to BNP exceeds the Purchase Price and
all other sums that are then due from KLA to BNP, KLA shall be entitled
to such excess.
-4-
(b) Election by KLA. KLA shall have the right to elect whether it
will satisfy the obligations set out in clause (1) or (2) of the preceding
Paragraph 2(a); provided, however, that KLA must comply with the following
requirements:
(1) To give BNP the opportunity to have the Fair Market Value
determined by an appraiser before the Designated Payment Date, KLA
must, unless KLA concedes that Fair Market Value will not be less than
fifteen percent (15%) of Stipulated Loss Value on the Designated
Payment Date, provide BNP with a Remarketing Notice (as defined below)
no sooner than one hundred eighty (180) days before the Designated
Payment Date and no later than ninety (90) days before the Designated
Date, specifying that KLA does not concede that the Fair Market Value
of the Property is equal to or greater than fifteen percent (15%) of
the Stipulated Loss Value. If for any reason (including but not limited
to any acceleration of the Designated Payment Date pursuant to clause
(2) of the definition of Designated Payment Date above) KLA fails to
provide a Remarketing Notice within the time periods specified in the
preceding sentence, Fair Market Value shall, for purposes of this
Agreement, be deemed to be no less than fifteen percent of Stipulated
Loss Value on the Designated Payment Date. "REMARKETING NOTICE" means a
notice given by KLA to BNP (and to each of the Participants) no earlier
than one hundred eighty (180) days before the Designated Payment Date
and no later than ninety (90) days before the Designated Payment Date.
A Remarketing Notice will be required only if KLA does not concede that
Fair Market Value of the Property will equal or exceed fifteen percent
(15%) of Stipulated Loss Value on the Designated Payment Date. But if
for any reason (including but not limited to any acceleration of the
Designated Payment Date pursuant to clause (2) of the definition of
Designated Payment Date above) KLA fails to provide a Remarketing
Notice within the time periods specified in the definition of
Remarketing Notice above, Fair Market Value of the Property shall, for
purposes of this Agreement, be deemed to be no less than fifteen
percent (15%) of Stipulated Loss Value on the Designated Payment Date.
(2) To give BNP the opportunity to prepare the Required
Documents before the Designated Payment Date, KLA must, if it is to
elect to satisfy the obligations set forth in clause (2) of Paragraph
2(a), specify an Applicable Purchaser in a notice to BNP given at least
seven (7) days prior to the Designated Payment Date. If for any reason
KLA fails to so specify an Applicable Purchaser, KLA shall be deemed to
have irrevocably elected to satisfy the obligations set forth in clause
(1) of Paragraph 2(a).
(c) Termination of KLA's Option To Purchase. Without limiting
BNP's right to require KLA to satisfy the obligations imposed by Paragraph 2(a),
KLA shall have no further option hereunder to purchase the Property if either:
(1) KLA shall have elected to satisfy the obligations set
forth in clause (2) of Paragraph 2(a) above on a Designated Payment
Date and BNP shall have elected to keep the Property on such Designated
Payment Date in accordance with clause (2) of Paragraph 2(a); or
(2) KLA shall have failed on a Designated Payment Date to make
or cause to be made all payments to BNP required by this Agreement or
by the Lease and such failure shall have continued beyond the thirty
(30) day period for tender specified in the next sentence.
-5-
If BNP does not receive all payments due under the Lease and all payments
required hereunder on a Designated Payment Date, KLA may nonetheless tender to
BNP the full Purchase Price and all amounts then due under the Lease, together
with interest on the total Purchase Price computed at the Default Rate from the
Designated Payment Date to the date of tender, and if presented with such a
tender within thirty (30) days after the applicable Designated Payment Date, BNP
must accept it and promptly thereafter deliver any Escrowed Proceeds and a deed
and all other Required Documents listed in Paragraph 3.
(d) Payment to BNP. All amounts payable under the preceding
Paragraphs 2(a), 2(b) or 2(c) by KLA and, if applicable, by the Applicable
Purchaser must be paid directly to BNP, and no payment to any other party shall
be effective for the purposes of this Agreement. In addition to the payments
required hereunder, on the Designated Payment Date KLA must pay all amounts then
due to BNP under the Lease. BNP will remit any excess amounts due KLA pursuant
to the last sentence of clause (2) of Paragraph 2(a) promptly after (and no
later than 30 days after) BNP's receipt of the same.
(e) Effect of Options on Subsequent Title Encumbrances. It is
the intent of BNP and KLA that any conveyance of the Property to KLA or any
Applicable Purchaser pursuant to this Agreement shall cut off and terminate any
interest in the Property claimed by, through or under BNP (but not any
unsatisfied obligations to BNP under the Lease, the Environmental Indemnity or
this Agreement). Such interests cut off and terminated will include but not be
limited to any interests in the Property claimed by Participants or any holder
of a Leasehold Mortgage, any leasehold or other interests in the Property
conveyed by BNP in the ordinary course of BNP's business and any other
Prohibited Encumbrances. Anyone accepting or taking any interest in the Property
by or through BNP after the date of this Agreement shall acquire such interest
subject to the rights and options granted KLA hereby. Further, KLA and any
Applicable Purchaser shall be entitled to pay any payment required by this
Agreement for the purchase of the Property directly to BNP notwithstanding any
prior conveyance or assignment by BNP, voluntary or otherwise, of any right or
interest in this Agreement or the Property, and neither KLA nor any Applicable
Purchaser shall be responsible for the proper distribution or application of any
such payments by BNP.
3. Terms of Conveyance Upon Purchase. Immediately after receipt
of all payments to BNP required pursuant to the preceding Paragraph 2, BNP must,
unless it is to keep the Property as permitted by clause (2) of Paragraph 2(a),
deliver Escrowed Proceeds, if any, and convey all of its right, title and
interest in the Property by grant deed to KLA or the Applicable Purchaser, as
the case may be, subject only to the Permitted Encumbrances (as defined in the
Lease) and any other encumbrances that do not constitute Prohibited
Encumbrances. However, such conveyance shall not include the right to receive
any payment under the Lease then due BNP or that may become due thereafter
because of any expense or liability incurred by BNP resulting in whole or in
part from events or circumstances occurring before such conveyance. All costs of
such purchase and conveyance of every kind whatsoever, both foreseen and
unforeseen, shall be the responsibility of the purchaser, and the form of grant
deed used to accomplish such conveyance shall be substantially in the form
attached as Exhibit B. With such grant deed, BNP shall also tender to KLA or the
Applicable Purchaser, as the case may be, the following, each fully executed
and, where appropriate, acknowledged on BNP's behalf by an officer of BNP: (1) a
Preliminary Change of Ownership Report in the form attached as Exhibit C, (2) a
Bill of Sale and Assignment of Contract Rights and Intangible Assets in the form
attached as Exhibit D, (3) an Acknowledgment of Disclaimer of Representations
and Warranties, in the form attached as Exhibit E, which KLA or the Applicable
Purchaser must execute and return to BNP, (5) a Documentary Transfer Tax Request
in the form attached as Exhibit F, (6) a Secretary's Certificate
-6-
in the form attached as Exhibit G, (7) a letter to the title insurance company
insuring title to the Property in the form attached as Exhibit H, and (8) a
certificate concerning tax withholding in the form attached as Exhibit I.
4. Survival of KLA's Obligations.
(a) Status of this Agreement. Except as expressly provided in the
last sentence of this subparagraph and elsewhere herein, this Agreement shall
not terminate, nor shall KLA have any right to terminate this Agreement, nor
shall KLA be entitled to any reduction of the Purchase Price hereunder, nor
shall the obligations of KLA to BNP under Paragraph 2 be affected by reason of
(i) any damage to or the destruction of all or any part of the Property from
whatever cause, (ii) the taking of or damage to the Property or any portion
thereof under the power of eminent domain or otherwise for any reason, (iii) the
prohibition, limitation or restriction of KLA's use of all or any portion of the
Property or any interference with such use by governmental action or otherwise,
(iv) any eviction of KLA or any party claiming under KLA by paramount title or
otherwise, (v) KLA's prior acquisition or ownership of any interest in the
Property, (vi) any default on the part of BNP under this Agreement, the Lease or
any other agreement to which BNP is a party, or (vii) any other cause, whether
similar or dissimilar to the foregoing, any existing or future law to the
contrary notwithstanding. It is the intention of the parties hereto that the
obligations of KLA hereunder (including KLA's obligation to make payments under
- - and, if applicable, to cause the Applicable Purchaser to make payments under -
Paragraph 2) shall be separate and independent of the covenants and agreements
of BNP. Accordingly, the Purchase Price and the Shortage Amount, as the case may
be under Paragraph 2, shall continue to be payable in all events, and the
obligations of KLA hereunder shall continue unaffected by any breach of this
Agreement by BNP. However, nothing in this subparagraph, nor the performance
without objection by KLA of its obligations hereunder, shall be construed as a
waiver by KLA of any right KLA may have at law or in equity, following any
failure by BNP to tender a grant deed and the other Required Documents as
required by Paragraph 3 upon the tender by KLA and/or the Applicable Purchaser
of the payments required by Paragraph 2 and of the other documents to be
executed in favor of BNP at the closing of the sale hereunder, to (i) recover
monetary damages proximately caused by such failure of BNP if BNP does not cure
the failure within thirty (30) days after KLA demands a cure by written notice
to BNP, or (ii) a decree compelling performance of BNP's obligation to so tender
a grant deed and the Required Documents.
(b) Remedies Under the Lease and the Environmental Indemnity. No
repossession of or re-entering upon the Property or exercise of any other
remedies available under the Lease or the Environmental Indemnity shall relieve
KLA of its liabilities and obligations hereunder, all of which shall survive the
exercise of remedies under the Lease and Environmental Indemnity. KLA
acknowledges that the consideration for this Agreement is separate and
independent of the consideration for the Lease and the Environmental Indemnity,
and KLA's obligations hereunder shall not be affected or impaired by any event
or circumstance that would excuse KLA from performance of its obligations under
the Lease or the Environmental Indemnity.
5. Remedies Cumulative. No right or remedy herein conferred upon
or reserved to BNP is intended to be exclusive of any other right or remedy BNP
has with respect to the Property, and each and every such right and remedy shall
be cumulative and in addition to any other right or remedy given hereunder or
now or hereafter existing at law or in equity or by statute. In addition to
other remedies available under this Agreement, either party shall be entitled,
to the extent permitted by applicable law, to a decree compelling performance of
any of the other party's agreements hereunder.
-7-
6. No Implied Waiver. The failure of either party to this
Agreement to insist at any time upon the strict performance of any covenant or
agreement of the other party or to exercise any remedy contained in this
Agreement shall not be construed as a waiver or a relinquishment thereof for the
future. The waiver by either party of or redress for any violation of any term,
covenant, agreement or condition contained in this Agreement shall not prevent a
subsequent act, which would have originally constituted a violation, from having
all the force and effect of an original violation. No express waiver granted by
either party shall affect any condition other than the one specified in such
waiver and that one only for the time and in the manner specifically stated. A
receipt by BNP of any payment hereunder with knowledge of the breach of this
Agreement shall not be deemed a waiver of such breach, and no waiver by either
party of any provision of this Agreement shall be deemed to have been made
unless expressed in writing and signed by the waiving party.
7. Attorneys' Fees and Legal Expenses. If either party commences
any legal action or other proceeding to enforce any of the terms of this
Agreement or the documents and agreements referred to herein, or because of any
breach by the other party or dispute hereunder or thereunder, the successful or
prevailing party, shall be entitled to recover from the nonprevailing party all
Attorneys' Fees incurred in connection therewith, whether or not such
controversy, claim or dispute is prosecuted to a final judgment. Any such
Attorneys' Fees incurred by either party in enforcing a judgment in its favor
under this Agreement shall be recoverable separately from such judgment, and the
obligation for such Attorneys' Fees is intended to be severable from other
provisions of this Agreement and not to be merged into any such judgment.
8. Estoppel Certificate. KLA and BNP will each, upon not less
than twenty (20) days' prior written request by the other, execute, acknowledge
and deliver to the requesting party a written statement certifying that this
Agreement is unmodified and in full effect (or, if there have been
modifications, that this Agreement is in full effect as modified, and setting
forth such modification) and either stating that no default exists hereunder or
specifying each such default of which the signer may have knowledge. Any such
statement may be relied upon by any Participant or prospective purchaser or
assignee of BNP with respect to the Property. Neither KLA nor BNP shall be
required to provide such a certificate more frequently than once in any six
month period; provided, however, that if either party determines that there is a
significant business reason for requiring a current certificate, including,
without limitation, the need to provide such a certificate to a prospective
purchaser or assignee, the other shall provide a certificate upon request
whether or not it had provided a certificate within the prior six month period.
9. Notices. Each provision of this Agreement referring to the
sending, mailing or delivery of any notice or referring to the making of any
payment to BNP, shall be deemed to be complied with when and if the following
steps are taken:
-8-
(a) All payments required to be made by KLA or the Applicable
Purchaser to BNP hereunder shall be paid to BNP in immediately available funds
by wire transfer to:
Federal Reserve Bank of San Francisco
Account: Banque Nationale de Paris
ABA #: 121027234
Reference: KLA Instruments (Phase III).
or at such other place and in such other manner as BNP may designate in a notice
to KLA (provided BNP will not unreasonably designate a method of payment other
than wire transfer). Time is of the essence as to all payments to BNP under this
Agreement. Any payments required to be made by BNP to KLA pursuant to the last
sentence of clause (2) of Paragraph 2(a) shall be paid to KLA in immediately
available funds by wire transfer to the account of KLA designated in writing by
KLA or as KLA may otherwise direct by written notice sent in accordance
herewith.
-9-
(b) All notices, demands and other communications to be made
hereunder to the parties hereto shall be in writing (at the addresses set forth
below) and shall be given by any of the following means: (A) personal service,
with proof of delivery or attempted delivery retained; (B) electronic
communication, whether by telex, telegram or telecopying (if confirmed in
writing sent by United States first class mail, return receipt requested); or
(C) registered or certified first class mail, return receipt requested. Such
addresses may be changed by notice to the other parties given in the same manner
as provided above. Any notice or other communication sent pursuant to clause (A)
or (C) hereof shall be deemed received (whether or not actually received) upon
first attempted delivery at the proper notice address on any Business Day
between 9:00 A.M. and 5:00 P.M., and any notice or other communication sent
pursuant to clause (B) hereof shall be deemed received upon dispatch by
electronic means.
Address of BNP:
BNP Leasing Corporation
717 North Harwood Street
Suite 2630
Dallas, Texas 75201
Attention: Lloyd Cox
Telecopy: (214) 969-0060
With a copy to:
Banque Nationale de Paris
180 Montgomery Street
San Francisco, California 94104
Attention: Rafael Lumanlan
Telecopy: (415) 296-8954
And with a copy to:
Dorothy H. Bjorck
Thompson & Knight, P.C.
1700 Pacific Avenue, Suite 3300
Dallas, Texas 75201
Telecopy: (214) 969-1550
Address of KLA:
KLA Instruments Corporation
160 Rio Robles
San Jose, California 95134
Attn: Christopher Stoddart, Treasurer
Telecopy: (408) 434-4268
With a copy to:
Gray Cary Ware & Freidenrich
-10-
400 Hamilton Avenue
Palo Alto, California 94301
Attn: Jonathan Rattner, Esq.
Telecopy: (415) 328-3029
10. Severability. Each and every covenant and agreement of KLA
contained in this Agreement is, and shall be construed to be, a separate and
independent covenant and agreement. If any term or provision of this Agreement
or the application thereof to any person or circumstances shall to any extent be
invalid and unenforceable, the remainder of this Agreement, or the application
of such term or provision to persons or circumstances other than those as to
which it is invalid or unenforceable, shall not be affected thereby. Further,
the obligations of KLA hereunder, to the maximum extent possible, shall be
deemed to be separate, independent and in addition to, not in lieu of, the
obligations of KLA under the Lease and other documents referenced herein. In the
event of any inconsistency between the express terms of this Agreement and the
express terms and provisions of the Lease or other documents referenced herein,
the terms and provisions of this Agreement shall control.
11. Entire Agreement. This Agreement and the documents and
agreements referred to herein set forth the entire agreement between the parties
concerning the subject matter hereof and no amendment or modification of this
Agreement shall be binding or valid unless expressed in a writing executed by
both parties hereto.
12. Paragraph Headings. The paragraph headings contained in this
Agreement are for convenience only and shall in no way enlarge or limit the
scope or meaning of the various and several paragraphs hereof.
13. Gender and Number. Within this Agreement, words of any gender
shall be held and construed to include any other gender and words in the
singular number shall be held and construed to include the plural, unless the
context otherwise requires.
14. GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO HAVE BEEN
MADE UNDER AND SHALL BE GOVERNED BY THE LAWS OF THE STATE OF CALIFORNIA.
15. Successors and Assigns. The terms, provisions, covenants and
conditions hereof shall be binding upon KLA and BNP and their respective
permitted successors and assigns and shall inure to the benefit of KLA and BNP
and all permitted transferees, mortgagees, successors and assignees of KLA and
BNP with respect to the Property; provided, that the rights of BNP hereunder
shall not pass to KLA or any Applicable Purchaser or any subsequent owner
claiming through them. Prior to the Designated Payment Date BNP may transfer,
assign and convey, in whole or in part, the Property and any and all of its
rights under this Agreement (subject to the terms of this Agreement) by any
conveyance that constitutes a Permitted Transfer, but not otherwise. If BNP
sells or otherwise transfers the Property and assigns its rights under this
Agreement and the Lease pursuant to a Permitted Transfer, and if BNP's successor
in interest confirms its liability for the obligations imposed upon BNP by this
Agreement and the Lease on and subject to the express terms set out herein and
therein, then BNP shall thereby be released from any further obligations
thereafter arising under this Agreement and the Lease, and KLA agrees to look
solely to each successor in interest of BNP for performance of such obligations.
16. WAIVER OF JURY TRIAL. BNP AND KLA EACH HEREBY WAIVES ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THE LEASE, THIS AGREEMENT OR ANY OTHER DOCUMENT OR ANY DEALINGS
BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION AND THE
RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this waiver is intended to
be all-encompassing of any and all disputes that may
-11
be filed in any court and that relate to the subject matter of this transaction,
including without limitation, contract claims, tort claims, breach of duty
claims, and all other common law and statutory claims. KLA and BNP each
acknowledge that this waiver is a material inducement to enter into a business
relationship, that each has already relied on the waiver in entering into this
Agreement and the other documents referred to herein, and that each will
continue to rely on the waiver in their related future dealings. KLA and BNP
each further warrant and represent that it has reviewed this waiver with its
legal counsel, and that it knowingly and voluntarily waives its jury trial
rights following consultation with legal counsel. THIS WAIVER IS IRREVOCABLE,
MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS
TO THIS AGREEMENT OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LEASE,
THIS AGREEMENT OR THE ENVIRONMENTAL INDEMNITY. In the event of litigation, this
Agreement may be filed as a written consent to a trial by the court.
17. Security. KLA's obligations under this Agreement are secured
by the Pledge Agreement, reference to which is hereby made for a description of
the Collateral (as defined in the Pledge Agreement) covered thereby and the
rights and remedies provided to BNP thereby. Although BNP shall be entitled to
hold all Collateral as security for the full and faithful performance by KLA of
KLA's covenants and obligations under this Agreement, the Collateral shall not
be considered an advance payment of the Purchase Price or any Shortage Amount or
a measure of BNP's damages should KLA breach this Agreement. If KLA does breach
this Agreement and fails to cure the same within any time specified herein for
the cure, BNP may, from time to time, without prejudice to any other remedy and
without notice to KLA, immediately apply the proceeds of any disposition of the
Collateral (and any cash included in the Collateral) to amounts then due
hereunder from KLA. If BNP assigns its interest in the Leased Property before
the Designated Payment Date, BNP may also assign BNP's interest in the
Collateral to the assignee.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
"BNP"
BNP LEASING CORPORATION, a Delaware corporation
By:
-------------------------------------------------
Lloyd G. Cox, Vice President
"KLA"
KLA INSTRUMENTS CORPORATION, a Delaware corporation
By:
-------------------------------------------------
Name: Christopher Stoddart, Treasurer
Title: Treasurer
-12-
EXHIBIT A
Legal Description
REAL PROPERTY in the City of San Jose, State of California, described as
follows:
A-1
EXHIBIT B
[Use printed form assignment provided by California counsel, but expressly
subject to encumbrances described in Annex B]
B-1
ANNEX A
(to Deed)
Legal Description
REAL PROPERTY in the City of San Jose, State of California, described as
follows:
B-2
Exhibit B
(to Grant Deed)
PERMITTED ENCUMBRANCES
This conveyance is subject to the matters described in the attached
pages and to the following matters to the extent the same are still valid and in
force:
[IF THE CONVEYANCE IS TO AN APPLICABLE PURCHASER:
__. Lease Agreement dated as of August 10, 1995 by and between BNP Leasing
Corporation, as lessor, and KLA Instruments Corporation, as lessee.
__. Any encumbrances claimed by, through or under KLA Instruments
Corporation]
[ADD A LIST OF ANY OTHER KNOWN ENCUMBRANCES FOR WHICH BNP IS NOT RESPONSIBLE
UNDER PARAGRAPH 10(A) OF THE LEASE.]
B-3
EXHIBIT C
[PRINTED FORM OF CHANGE OF OWNERSHIP REPORT TO BE ATTACHED]
C-1
EXHIBIT D
BILL OF SALE, ASSIGNMENT OF CONTRACT
RIGHTS AND INTANGIBLE ASSETS
Assignor hereby sells, transfers and assigns unto [KLA OR THE
APPLICABLE PURCHASER, AS THE CASE MAY BE], a _____________ ("ASSIGNEE"), all of
Assignor's right, title and interest in and to the following property, if any,
to the extent such property is assignable:
(a) all licenses, permits or similar consents (excluding any
prepaid utility reservations) from third parties to the extent related to the
real property described in Annex A attached hereto (the "Property");
(b) any pending or future award made because of any condemnation
affecting the Property or because of any conveyance to be made in lieu thereof,
and any unpaid award for damage to the Property and any unpaid proceeds of
insurance or claim or cause of action for damage, loss or injury to the
Property;
(c) any goods, equipment, furnishings, furniture, chattels and
personal property of whatever nature that are located on or about the
Property; and
(d) any general intangibles, permits, licenses, franchises,
certificates, and other rights and privileges owned by Assignor and used solely
in connection with, or relating solely to, the Property, excluding any rights or
privileges of Assignor under (i) the Environmental Indemnity, as defined in that
certain Purchase Agreement between Assignor and KLA Instruments Corporation
dated as of August 10, 1995 (the "PURCHASE AGREEMENT") (pursuant to which this
document is being delivered), (ii) the Lease, as defined in the Purchase
Agreement, to the extent rights under the Lease relate to the period ending on
the date hereof, whether such rights are presently known or unknown, including
rights of the Assignor to be indemnified against claims of third parties as
provided in the Lease which may not presently be known, and including rights to
recover any accrued unpaid rent under the Lease which may be outstanding as of
the date hereof, (iii) agreements between Assignor and Participants, as defined
in the Lease, or any modification or extension thereof, and (iv) any other
instrument being delivered to Assignor contemporaneously herewith pursuant to
the Purchase Agreement.
Assignor does for itself and its heirs, executors and administrators,
covenant and agree to warrant and defend the title to the property assigned
herein against the just and lawful claims and demands of any person claiming
under or through Assignor, but not otherwise; excluding, however, any claim or
demand arising by, through or under [KLA].
Assignee hereby assumes and agrees to keep, perform and fulfill
Assignor's obligations, if any, relating to any permits or contracts, under
which Assignor has rights being assigned herein.
D-1
Executed:__________________________________, 199__.
ASSIGNOR:
BNP LEASING CORPORATION
a Delaware corporation
By:_________________________________________________
Its:________________________________________________
ASSIGNEE:
[KLA, OR THE APPLICABLE PURCHASER], a
_________ corporation
By:_________________________________________________
Its:________________________________________________
D-2
ANNEX A
Legal Description
REAL PROPERTY in the City of San Jose, State of California, described as
follows:
D-3
EXHIBIT E
ACKNOWLEDGMENT OF DISCLAIMER OF REPRESENTATIONS AND WARRANTIES
THIS ACKNOWLEDGMENT OF DISCLAIMER OF REPRESENTATIONS AND WARRANTIES
(this "CERTIFICATE") is made as of ___________________, 199___, by [KLA or the
Applicable Purchaser, as the case may be], a ___________________ ("GRANTEE").
Contemporaneously with the execution of this Certificate, BNP Leasing
Corporation, a Delaware corporation ("BNP"), is executing and delivering to
Grantee (1) a grant deed covering a leasehold estate under a ground lease and
(2) a Bill of Sale, Assignment of Contract Rights and Intangible Assets (the
foregoing documents and any other documents to be executed in connection
therewith are herein called the "Conveyancing Documents" and any of the
properties, rights or other matters assigned, transferred or conveyed pursuant
thereto are herein collectively called the "SUBJECT PROPERTY").
NOTWITHSTANDING ANY PROVISION CONTAINED IN THE CONVEYANCING DOCUMENTS
TO THE CONTRARY, GRANTEE ACKNOWLEDGES THAT BNP MAKES NO REPRESENTATIONS OR
WARRANTIES OF ANY NATURE OR KIND, WHETHER STATUTORY, EXPRESS OR IMPLIED, WITH
RESPECT TO ENVIRONMENTAL MATTERS OR THE PHYSICAL CONDITION OF THE SUBJECT
PROPERTY, AND GRANTEE, BY ACCEPTANCE OF THE CONVEYANCING DOCUMENTS, ACCEPTS THE
SUBJECT PROPERTY "AS IS," "WHERE IS," "WITH ALL FAULTS" AND WITHOUT ANY SUCH
REPRESENTATION OR WARRANTY BY GRANTOR AS TO ENVIRONMENTAL MATTERS, THE PHYSICAL
CONDITION OF THE SUBJECT PROPERTY, COMPLIANCE WITH SUBDIVISION OR PLATTING
REQUIREMENTS OR CONSTRUCTION OF ANY IMPROVEMENTS. Without limiting the
generality of the foregoing, Grantee hereby further acknowledges and agrees that
warranties of merchantability and fitness for a particular purpose are excluded
from the transaction contemplated by the Conveyancing Documents, as are any
warranties arising from a course of dealing or usage of trade. Grantee hereby
assumes all risk and liability (and agrees that BNP shall not be liable for any
special, direct, indirect, consequential, or other damages resulting or arising
from or relating to the ownership, use, condition, location, maintenance,
repair, or operation of the Subject Property, except for damages proximately
caused by (and attributed by any applicable principles of comparative fault to)
the wilful misconduct, Active Negligence or gross negligence of BNP, its agents
or employees. As used in the preceding sentence, "Active Negligence" of a party
means, and is limited to, the negligent conduct of activities actually on or
about the Property by that party in a manner that proximately causes actual
bodily injury or property damage to be incurred. "Active negligence" shall not
include (1) any negligent failure of BNP to act when the duty to act would not
have been imposed but for BNP's status as owner of any interest in the Subject
Property or as a party to the transactions pursuant to which BNP is delivering
this instrument (the "APPLICABLE TRANSACTIONS"), (2) any negligent failure of
any other party to act when the duty to act would not have been imposed but for
such party's contractual or other relationship to BNP or participation or
facilitation in any manner, directly or indirectly, of the Applicable
Transactions, or (3) the exercise in a lawful manner by BNP (or any party
lawfully claiming through or under BNP) of any remedy provided in connection
with the Applicable Transactions.
The provisions of this Certificate shall be binding on Grantee, its
successors and assigns and any other party claiming through Grantee. Grantee
hereby acknowledges that BNP is entitled to rely and is relying on this
Certificate.
E-1
EXECUTED as of ________________, 199___.
____________________, a ____________________
By:_________________________________________
Name:____________________________________
Title:___________________________________
E-2
EXHIBIT F
DOCUMENTARY TRANSFER TAX REQUEST
ACCOUNTABLE FORM #_________
DATE:_______________
To: _________ County Recorder
Subject: REQUEST THAT DOCUMENTARY TRANSFER TAX DECLARATION BE MADE IN
ACCORDANCE WITH REVENUE CODE 11932.
Re: Instrument Title: Grant Deed
Name of Party Conveying Title: BNP Leasing Corporation
The Documentary Transfer Tax is declared to be in the amount of $_______________
for the referenced instrument and is:
/ / Computed on full value of property conveyed.
/ / Computed on full value less liens/encumbrances remaining
thereon at time of sale.
This separate declaration is made in accordance with_________________________.
It is requested that the amount paid not be indicated on the face of the
document after the permanent copy has been made.
Sincerely,
___________________________________
Individual (or his agent) who made,
signed or issued instrument
PART I
RECORDING REFERENCE DATA:
Serial #____________________ Date Recorded____________________
SEPARATE PAPER AFFIXED TO INSTRUMENT:
"Tax paid" indicated on the face of instrument and the separate request
(DRA 3-A) was affixed for Recorder by:
___________________________________ Date____________
Documentary Transfer Tax Collector
Witnessed by:______________________ Date____________
F-1
Mail Clerk
(Note: Prepare photo for Recorder file.)
PART II ACCOUNTABLE FORM #_________
REFERENCE DATA: Title:________________________________________________________
Serial:____________________________________ Date:____________
INSTRUCTIONS:
1. This slip must accompany document.
2. Mail Clerk hand carry document to Tax Collector to indicate
the amount of tax paid.
F-2
EXHIBIT G
SECRETARY'S CERTIFICATE
The undersigned, Secretary of BNP Leasing Corporation, a Delaware
corporation (the "CORPORATION"), hereby certifies as follows:
1. That he is the duly, elected, qualified and acting Secretary
[or Assistant Secretary] of the Corporation and has custody of the corporate
records, minutes and corporate seal.
2. That the following named persons have been properly
designated, elected and assigned to the office in the Corporation as indicated
below; that such persons hold such office at this time and that the specimen
signature appearing beside the name of such officer is his or her true and
correct signature.
[THE FOLLOWING BLANKS MUST BE COMPLETED WITH THE NAMES AND SIGNATURES OF THE
OFFICERS WHO WILL BE SIGNING THE DEED AND OTHER REQUIRED DOCUMENTS ON BEHALF OF
THE CORPORATION.]
Name Title Signature
_______________ _______________ ____________________
_______________ _______________ ____________________
3. That the resolutions attached hereto and made a part hereof
were duly adopted by the Board of Directors of the Corporation in accordance
with the Corporation's Articles of Incorporation and Bylaws, as evidenced by the
signatures of all directors of the Corporation affixed thereto. Such resolutions
have not been amended, modified or rescinded and remain in full force and
effect.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the seal
of the Corporation on this ___, day of _________, 199 .
____________________
[signature]
G-1
CORPORATE RESOLUTIONS OF
BNP LEASING CORPORATION
WHEREAS, pursuant to that certain Purchase Agreement (herein called the
"PURCHASE AGREEMENT") dated as of August 10, 1995, by and between BNP Leasing
Corporation (the "CORPORATION") and [KLA OR THE APPLICABLE PURCHASER AS THE CASE
MAY BE] ("PURCHASER"), the Corporation agreed to sell and Purchaser agreed to
purchase or cause the Applicable Purchaser (as defined in the Purchase
Agreement) to purchase the Corporation's interest in the property (the
"PROPERTY") located in San Jose, California more particularly described therein.
NOW THEREFORE, BE IT RESOLVED, that the Board of Directors of the
Corporation, in its best business judgment, deems it in the best interest of the
Corporation and its shareholders that the Corporation convey the Property to
Purchaser or the Applicable Purchaser pursuant to and in accordance with the
terms of the Purchase Agreement.
RESOLVED FURTHER, that the proper officers of the Corporation, and each
of them, are hereby authorized and directed in the name and on behalf of the
Corporation to cause the Corporation to fulfill its obligations under the
Purchase Agreement.
RESOLVED FURTHER, that the proper officers of the Corporation, and each
of them, are hereby authorized and directed to take or cause to be taken any and
all actions and to prepare or cause to be prepared and to execute and deliver
any and all deeds and other documents, instruments and agreements that shall be
necessary, advisable or appropriate, in such officer's sole and absolute
discretion, to carry out the intent and to accomplish the purposes of the
foregoing resolutions.
IN WITNESS WHEREOF, we, being all the directors of the Corporation,
have hereunto signed our names as of the dates indicated by our signatures.
____________________
[signature and date]
____________________
[signature and date]
____________________
[signature and date]
G-2
EXHIBIT H
BNP LEASING CORPORATION
717 N. HARWOOD
SUITE 2630
DALLAS, TEXAS 75201
_________, 199_
[Title Insurance Company]
_________________________
_________________________
_________________________
Re: Recording of Grant Deed to [KLA or the Applicable Purchaser]
("PURCHASER")
Ladies and Gentlemen:
BNP Leasing Corporation has executed and delivered to Purchaser a Grant
Deed in the form attached to this letter. You are hereby authorized and directed
to record the grant deed at the request of Purchaser.
Sincerely,
H-1
EXHIBIT I
FIRPTA STATEMENT
Section 1445 of the Internal Revenue Code of 1986, as amended, provides
that a transferee of a U.S. real property interest must withhold tax if the
transferor is a foreign person. Sections 18805, 18815 and 26131 of the
California Revenue and Taxation Code, as amended, provide that a transferee of a
California real property interest must withhold income tax if the transferor is
a nonresident seller.
To inform [____________________ OR THE APPLICABLE PURCHASER, AS THE
CASE MAY BE] (the "TRANSFEREE") that withholding of tax is not required upon the
disposition of a California real property interest by transferor, BNP Leasing
Corporation ("BNP"), the undersigned hereby certifies the following on behalf of
BNP:
1. BNP is not a foreign corporation, foreign partnership, foreign
trust, or foreign estate (as those terms are defined in the Internal Revenue
Code and Income Tax Regulations);
2. The United States employer identification number for BNP is
_____________________;
3.The office address of BNP is ______________________________________.
[NOTE: BNP MUST INCLUDE EITHER ONE, BUT ONLY ONE, OF THE FOLLOWING
REPRESENTATIONS IN THE FIRPTA STATEMENT, BUT IF THE ONE INCLUDED STATES THAT BNP
IS DEEMED EXEMPT FROM CALIFORNIA INCOME AND FRANCHISE TAX, THEN BNP MUST ALSO
ATTACH A WITHHOLDING CERTIFICATE FROM THE CALIFORNIA FRANCHISE TAX BOARD
EVIDENCING THE SAME:
4. BNP IS QUALIFIED TO DO BUSINESS IN CALIFORNIA.
OR
4. BNP IS DEEMED TO BE EXEMPT FROM THE WITHHOLDING REQUIREMENT OF
CALIFORNIA REVENUE AND TAXATION CODE SECTION 26131(E), AS EVIDENCED BY THE
WITHHOLDING CERTIFICATE FROM THE CALIFORNIA FRANCHISE TAX BOARD WHICH IS
ATTACHED.]
BNP understands that this certification may be disclosed to the
Internal Revenue Service and/or to the California Franchise Tax Board by the
Transferee and that any false statement contained herein could be punished by
fine, imprisonment, or both.
BNP understands that the Transferee is relying on this affidavit in
determining whether withholding is required upon said transfer. BNP hereby
agrees to indemnify and hold the Transferee harmless from and against any and
all obligations, liabilities, claims, losses, actions, causes of action,
demands, rights, damages, costs, and expenses (including but not limited to
court costs and attorneys' fees) incurred by the Transferee as a result of any
false misleading statement contained herein.
I-1
Under penalties of perjury I declare that I have examined this
certification and to the best of my knowledge and belief it is true, correct and
complete, and I further declare that I have authority to sign this document on
behalf of BNP.
Dated:____________, 199___.
By:_______________________
Name:__________________
Title:_________________
I-2